Rates (tax)

This article is about the property tax system. For the burden ratio at which a business or person is taxed, see Tax rate.

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

Australia

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.

Canada

Main article: Taxation_in_Canada § Property_taxes

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.

Hong Kong

Main article: Rates in Hong Kong

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

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

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.

New Zealand

Numerous Rating Acts and their amendments have sustained local governments in New Zealand for over a century. Currently, rates are levied by Territorial Authorities and Regional Authorities; the regional rates are collected from the owner by the relevant Territorial Authority and then forwarded to the Regional Authority. Rental value is not the commonest criterion; land value and improved value (also known as capital 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, and some components of rates are computed on the basis of land area.

United Kingdom

Main article: Rates in the United Kingdom

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.

Business rates are collected throughout the United Kingdom, with different systems in England and Wales, in Northern Ireland and in Scotland.

United States

Main article: Property tax in the United States

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.

See also

• Property tax

External links

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