Rates are a type of property tax system in the United Kingdom, and in places with systems deriving from the British one, the proceeds of which are used to fund local government. Some other countries have taxes with a more or less comparable role, for example France's taxe d'habitation.
Rates by country
Local government authorities levy annual taxes, which are called council rates or shire rates. The basis on which these charges can be calculated varies from state to state, but is usually based in some way on the value of property. Even within states, individual local government authorities can often choose the specific basis of rates - for example, it may be on the rental value of property (as in Western Australia) or on the unimproved land value (as in New South Wales). These rateable valuations are usually determined by a statutory authority, and are subject to periodic revision.
Rates are referred to as property taxes in Canada. These taxes are collected primarily by municipal governments on residential, industrial and commercial properties and are their main source of funding.
In Hong Kong, rates on property is based on the nominal rental value of the property. Unlike in England and Wales, it is still levied on domestic property as well as non-domestic premises. Prior to 2000, it was used to fund municipal services, the responsibility of the now-abolished Urban Council and Regional Council, through the Urban Services Department and Regional Services Department. The revenue now goes to the Treasury. The bill is issued quarterly.
Ireland is introducing rates in 2013 after having abolished them in 1977. The rates will be based on a self-assessment of the property values and set at 0.18% of a property's value annually, and 0.25% for any part of a property's value over €1m.
Israel has a similar tax known as arnona that goes back to the days of the British Mandate of Palestine. It is levied by the municipality (or, in smaller localities, by the moatza eizorit, i.e., Regional Council) based (currently) on the square meterage of dwelling or business. Specific rates vary widely among municipalities, with Jerusalem and Rehovot having the highest rates in the country. In rental dwellings, tenants (rather than owners) generally pay the arnona. Single parents and some forms of economic hardship qualify for discounts or even exemptions.
Numerous Rating Acts and their amendments have sustained Territorial Authorities of New Zealand for over a century. Rental value is not the commonest criterion: land value and improved value have been more commonly used. Many exceptions are provided in legislation to reduce perceived unfairness of whichever system the council is using. In addition to general rates based on property values, councils also levy flat rate charges called targeted rates and uniform annual general charges.
Rates in the United Kingdom are a tax on property used to provide some of the funding of local government.
Domestic rates, split into regional and district rates, are currently collected in Northern Ireland. They were collected in England and Wales before 1990 and in Scotland before 1989. Outside Northern Ireland Council Tax is collected instead of domestic rates.
In the US, real estate taxes which are based on a percentage of the property's actual or nominal value are referred to as "property taxes". The term "rates" is not used in this context. Property taxes are the prime funding method for local government, and are normally the responsibility of the property owner, regardless of whether the property owner lives on the property.
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- "Rating and Taxing Valuation". Landgate. Retrieved 24 November 2012.
- "About Rates". City of Sydney. Retrieved 6 April 2013.
- Government, Local. "Council funding". www.localcouncils.govt.nz. Retrieved 2015-12-03.
- Dobson, Alban; Hull, Hubert (1931). The Land Drainage Act 1930. Oxford University Press.