Hume council will explore the introduction of a differential rating system which would charge a different rate in the dollar to different property classes.
Council currently uses a flat rate system which applies the same rate in the dollar to every property across the municipality.
The introduction of a differential rating system would enable council to vary the rate in the dollar charged to different classes of property, such as residential, commercial or industrial.
The system would not alter the total rates raised by council, which is determined by the state government’s rate cap.
At council’s Monday, February 10 meeting, councillor Sam Misho asked council officers to provide options and scenarios on how differential rating may impact the distribution or allocation of rates across the various classes of properties within Hume.
He said differential rates were already used by a number of councils across Victoria, adding that councillors had planned to explore the issue during the last term of council but had to postpone their plans as a result of the pandemic.
“We use a blanket approach when applying rates over four classes of property based on capital improved value,” Cr Misho said.
“A residential property is not an income producing property compared with a commercial or industrial property.
“This report seeks to explore whether a differential rating system is more appropriate in our municipality.”
Cr Naim Kurt said he was keen for council to explore a differential system, noting that developers and and big businesses pay the same rate in the dollar as the owners of a one-bedroom townhouse in Broadmeadows.
“Rates are a system of taxation and as a level of government, it is our job to soften the hard edges of any rates system,” he said.
Council officers will prepare a report for councillors on the issue as part of council’s 2026-27 budget process.
