Special rates and charges

Sometimes council will levy special rates or special charges. These are different from general rates and charges because they are levied for particular works or services and they are levied on a limited number of ratepayers.

The Local Government Act enables councils to levy a special rate, a special charge (or a combination of these) to help pay for any council service or activity that will be of special benefit to a particular group of property owners. A “special benefit” is a benefit that is additional to, or greater than, the benefit generally available to other people.

Common examples of special rates or charges include schemes for constructing footpaths, roads, kerbs and channels or drains; and arrangements for providing services like promotion, marketing or economic development (eg for commercial businesses).

While a council may set a special rate or charge for almost any type of activity that the council undertakes, it is limited by provisions of the Act which require special rates and charges to be levied in proportion to special benefits. Before a council proposes a special rate or charge, it must estimate the proportion of the benefits of the proposed works or services that will be of benefit to the people who are liable to pay.

For example, before a council proposes a special charge for a road construction scheme it will calculate what share of the benefits of the road construction will provide for the adjoining properties (improved drainage, reduced dust, better access, etc) compared with general benefits to other people (eg other drivers using the road). The council will limit the total proportion of costs to be paid by all the property owners to their combined share of the benefits.

The council will also set criteria to determine how the rate or charge will be apportioned between the affected ratepayers. Understanding the way a special rate or special charge is apportioned can be complicated. Contact your local council for more detail.

The main provision allowing councils to levy special rates and charges is in Section 163 of the Local Government Act 1989.

Public notice and consultation

Councils will often ask the community for comment before formally proposing a special rate or charge scheme. This type of consultation is at the discretion of council.

Before finalising a special rate or charge the council must, by law, undertake formal public consultation.

For all special rate or charge schemes, the council will give public notice of the proposal and write to all affected ratepayers with information about the proposed scheme. Full details of the proposal will also be available for inspection at the council office.

People are entitled to make written submissions to the council regarding a proposed special rate or charge and, if they wish, they may request to appear in person to present their case to a council or committee meeting. Under section 223 of the Local Government Act, the council is required to consider all submissions that are received within 28 days of the public notice, although councils may allow a longer time for submissions.

If the council is proposing to raise more than two thirds of the total cost of a project as a special rate or charge, the affected ratepayers must also be given a formal right to object. If objections are received from a majority of properties within 28 days the council cannot approve the special rate or charge. This objection process does not apply for drainage schemes that are required for public health.

Appeals to VCAT

Under certain conditions, people who are required to pay a special rate or special charge may appeal to the Victorian Civil Administrative Tribunal (VCAT).

Rights of appeal to VCAT are subject to a number of limitations, including time limitations. If you believe there may be justifiable grounds for an appeal to VCAT you may be wise to seek your own legal advice, promptly, about the matter.

Variations to special rates and charges

A council may vary a special rate or special charge it has imposed. This variation may relate to the amount to be paid, the persons liable or the land affected.

If a variation to a special rate or charge means that people not previously liable now have to pay or if there is a material difference in the amounts to be paid, the council must advertise the variation and people may lodge submissions under section 223 of the Local Government Act.