Rates rises for many home owners in Hobsons Bay may be much higher than the legislated 2.5 per cent next financial year due to a leap in property valuations.
Hobsons Bay council last week released its draft 2015-16 budget for six weeks of community consultation.
Rates will be based on new property valuations. Many suburbs in Hobsons Bay have been experiencing double-digit percentage growth in property prices, which will have an impact on the new valuations.
Cr Colleen Gates said that under the council’s new rating strategy, people whose property value had risen by 14.69 per cent over the past two years would receive a 2.5 per cent rate rise.
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“If the value of your property has increased by more than that, you will see a rate increase that’s more than 2.5 per cent,” she said.
Cr Gates said some people might even get a discount if their property value had not risen by 14.69 per cent.
According to REIV figures, Altona North, Altona Meadows, Brooklyn and Seaholme recorded growth in house prices of 30 per cent or higher in the past two years. Brooklyn prices rose 38 per cent, Altona North 36 per cent, Altona Meadows 32 per cent and Seaholme 30 per cent. South Kingsville house prices were up 28 per cent and Altona and Williamstown both grew by 23 per cent.
Seabrook recorded the lowest growth in Hobsons Bay at six per cent, while Laverton house prices rose 14 per cent.
Council spending
The council has allocated $33.49 million for capital works, including $11.4million on roads, trails and footpaths; $1.8million on drainage; $8.2million on open space, carparks and facilities; $8.6million on buildings; and $2.2million on machinery and equipment.
Mayor Peter Hemphill said the council had managed the cap on rate rises by reducing operating expenditure.
“There is a common misconception that as property values increase, council receives a windfall gain of additional revenue,” he said.
“This is not the case as the revaluation process results in a redistribution of the rate burden across all properties in the municipality.”
“While council proposes a rate increase that is in line with the legislated 2.5 per cent cap, the actual rate increases experienced by individual ratepayers will be different due to this being a municipal revaluation year.”
