Rebalancing Rates Frequently Asked Questions

Council has reviewed how rates are currently distributed to ensure costs are shared fairly, transparently and sustainably as The Hills continues to grow and change.

The review found that owners of apartments and townhouses (multi-unit dwellings) currently contribute less on average toward services funded through general purpose revenue than owners of standalone homes (single-unit dwellings). Based on current rating data, average rates for single-unit dwellings are $1,406, while apartments average $783. Council’s analysis of the net cost of services funded through general purpose revenue also found multi-unit dwellings contribute considerably less to the cost of these services, placing a disproportionate burden on single-unit dwellings. The proposed changes aim to rebalance this within the residential category.

Based on modelling, around 47,482 single-unit dwellings are expected to see a decrease, while around 13,324 multi-unit dwellings are expected to see an increase under the proposed structure (individual outcomes vary).

The Hills Shire is forecast to grow strongly (more than 50% by 2046) with a rising share of multi-unit dwellings. Under current targets, the dwelling mix is projected to shift from around 82% houses / 18% apartments to around 71% houses / 29% apartments.

To keep delivering the services, parks, roads and facilities our community relies on, Council needs a rating structure that remains fair and sustainable as the area grows and as Council transitions toward a more maintenance-focused organisation.

Multi-unit dwellings are expected to increase overall under the proposed structure, with the size of the change varying by property. This reflects a category-level correction to how the (rate-pegged) total is shared.

Council is not proposing rates based on the number of occupants in a dwelling. Under the NSW rating framework, rates are calculated using unimproved land value within rating categories not household size.

Introducing a revised structure now is a proactive step to support long-term financial resilience and equitable cost sharing into the future.

Council’s objective is to ensure the rating system remains fair and equitable for all ratepayers, while continuing to maintain infrastructure and services to meet the changing needs and growth of our community.

This proposal does not increase Council’s total rates income beyond the rate peg set by IPART. Instead, it changes how the total (capped) permissible rates income is shared between properties, so contributions remain equitable as the Shire grows.

A sustainable rating structure supports long-term financial resilience and helps ensure costs are shared fairly across current and future ratepayers (intergenerational equity).

As new properties are added, Council’s rate base grows over time. However, growth also increases the infrastructure and service base Council must maintain and renew, and renewal needs are driven by asset condition and lifecycle requirements. For this reason, growth alone is not a reliable substitute for a sustainable and equitable rating structure particularly as the Shire’s dwelling mix shifts toward more multi-unit housing and Council must ensure the rate-pegged total is shared fairly between existing ratepayers.

No. Council’s proposed changes have been independently reviewed by Morrison Low Advisory, a respected local government consultancy. The review assessed compliance with the Local Government Act 1993 and key rating principles, including fairness, the use of a minimum/ad valorem structure, and the basis for the Infrastructure Renewal Rate as a special rate. The review concluded the proposed structure is robust, compliant and strategically aligned with Council’s long-term objectives.

Rates are calculated using land values set independently by the NSW Valuer General. These values don’t include buildings — only the land itself.

When new land valuations are issued, they don’t increase the total amount Council collects, but they may change how the total is shared between ratepayers.

This means your rates may increase or decrease depending on how your land value changes compared to others in the same category.

The Independent Pricing and Regulatory Tribunal (IPART) sets a cap on how much councils can increase overall rates income each year. This is called the rate peg. It helps councils cover rising costs such as fuel, electricity, materials and construction just to a name a few, without increasing rates beyond legislated limits.

The rate peg applies to Council’s total income — not to each individual ratepayer. Individual rates may still change based on land valuations and Council’s rating structure, with some resulting in rates higher, lower or about the same as the rate peg. Council’s total income can only go up by the rate peg and through growth.

New land valuations applying to The Hills Shire will take effect from 1 July 2026.

You may read more about the Rate Peg on the IPART website here.

The rate peg for The Hills Shire Council in 2026/27 is 4.7%. Council cannot lift its total rate revenue by more than this amount without applying for a Special Rate Variation — which Council is not doing.

No, the new rating structure is not a “Special Rate Variation”.

The Hills Shire Council, and its ratepayers, can take some comfort in having one of the lowest average rates when compared to other Metropolitan Councils.

Council has not sought a special rate variation in several decades now, unlike what you would see with many other NSW Councils in recent years.

A Special Rate is a charge that Council can apply under Section 495 of the Local Government Act 1993 to fund specific works, services, facilities, or activities within all or part of the Council area (excluding domestic waste services).

It is different from a Special Rate Variation (SRV) and does not require IPART approval if Council’s total rates income remains within the rate peg.

The Infrastructure Renewal Rate (IRR) is a Special Rate that will help fund renewal and maintenance with a budget of approximately $42m and comprises of:

• Roads, drainage and footpaths
• Parks and open spaces
• Shire presentation and beautification

As the Shire grows, Council’s community infrastructure asset base expands and then ages over time, which increases renewal needs as part of normal lifecycle management.

Council is responsible for managing around $5.9 billion worth of assets overall. Within this, Council’s community infrastructure assets have a replacement cost of approximately $2.7 billion.

The IRR is based on budgeted infrastructure renewal expenditure across Civil, Parks and Shire Presentation assets and totals approximately $42 million. It will appear as a separate line item on rates notices to improve transparency about infrastructure renewal funding.

Renewal is different from day-to-day maintenance: Council budgets separately for planned renewals and for ongoing maintenance, guided by asset condition and remaining useful life.

The Infrastructure Renewal Rate of $42 million will form part of Council’s total estimated rates income of $112 million which is allowed under the Rate peg.

The Infrastructure Renewal Rate will have both:

• Base component: A fixed amount applied to all properties.
• Ad valorem component: A variable amount based on the property’s land value.

The remaining $70 million required for Council services will be collected through the Ordinary Rate, which will use a minimum/ad valorem structure.

Rates are charged under three categories:

• Residential
• Business
• Farmland

Business applies to commercial or industrial land.

Farmland applies to land used for primary production.

Residential applies to all homes and is divided into:

• Single-unit dwellings – standalone homes on land owned by one owner, usually with private yards and driveways.

• Multi-unit dwellings – apartments or townhouses that share common property and facilities under strata.

The proposed changes primarily affect the residential category, ensuring a fairer balance between single-unit and multi-unit homes.

Ordinary rates are the general property taxes councils levy on all rateable land. Ordinary rates provide councils with a stable revenue source for day-to-day operations.

• Ordinary rates apply to all rateable land unless exempt.
• For this Council, there are three categories: Residential, Business, and Farmland.
• They can be structured as:
  • Ad valorem amount (percentage of land value), possibly subject to a minimum
  • Or Base amount plus ad valorem amount.

A minimum rate is a fixed amount paid by lower-value properties.

An ad valorem rate is a percentage applied to the land value.

Properties with land values below a set threshold pay the minimum.

Properties above the threshold pay the ad valorem amount.

This approach ensures all ratepayers contribute, while still reflecting differences in land value.

What the new structure changes is how the rates are shared across different types of properties. So yes, you will see an increase, but the increase would still happen even if Council kept the current rating structure. What changes is the amount, not the fact that rates rise each year. For most of the Shire, who are standalone, single unit dwellings, the new rates amount will be less versus if Council stuck with the current rating structure.

For all ratepayers, there will be a redistribution of rates with the revised new rating structure.

Your rates may go up or down depending on the land value of your property and the rate peg.

So, there could be changes to the amount of rates you pay, and this really depends on the movement of your land value relative to other ratepayers in the same category.

The change is designed to be fair and equitable, ensuring all property types contribute proportionately. The overall rate peg set by IPART is not exceeded, meaning that any changes remain within legislated limits. Council will provide detailed information on the impact for different property categories before implementation.

To work out the amount your rates will change, you can use the rates calculator via the link below. You will need your assessment number ready, which you can find on your current rates notice.

Access the Rates Calculator here

Business properties will remain on a Base plus Ad Valorem structure and will contribute to the Infrastructure Renewal Rate, with some adjustments to the base amounts. These changes maintain consistency with the current system.

Individual business rates will still vary based on land value and the rate peg.

Farmland properties will also stay on the Base plus Ad Valorem structure and will contribute to the Infrastructure Renewal Rate.

Lower-value properties may pay less and higher-value properties may pay more — while still keeping the total revenue contributed by Farmland properties unchanged.

No, the proposed changes only affect the rates component of your bill. Domestic Waste Management Charges (DWMC) are calculated separately from property rates and are based on the reasonable cost of providing waste and recycling services, as required under section 504 of the Local Government Act 1993. While your total bill includes both rates and waste charges, the rating structure change does not alter how waste charges are determined.

No. The stormwater management charge is separate from property rates and is not affected by the proposed rating structure changes. This charge is designed to fund new or additional stormwater management services and has remained unchanged since its introduction in 2006.

Independent analysis shows The Hills Shire Council is among councils with one of the lowest average rates across all categories when compared with other similar metropolitan councils.

Data was taken from the Office of Local Government’s (OLG) published time series data for the 2023/2024 Financial Year and escalated by the rate peg and any special rate variation for all the above Councils for the 2024/2025 and 2025/2026 Financial Years. The resulting information confirmed that The Hills Shire Council has the lowest average rates for all of the rating categories.

Council has been debt free since 2002. Borrowing adds interest costs and only delays the need to sustainably fund infrastructure. A reliable income base ensures stable long-term service delivery.

Council continually reviews operations to ensure efficiency, including:

• Streamlining services
• Reducing overheads
• Seeking grants and external funding.

These measures help minimise the impact on ratepayers.

Council has consistently looked to reduce its reliance on rates income by making sure where possible, to seek additional or new revenue streams, such as fees and user charges and other non-rates revenue.

Council’s property portfolio, investment strategy and initiatives like advertising on bridges, are all measures to diversify income streams. Whilst this is a sensible approach, the quantum of the increase in income can be difficult as most of the income are either legislated, dependent on activity, or tied to existing agreements.

It is also important to note that other income sources which are not rates are vulnerable to fluctuations driven by economic, social, policy, and market conditions.

Funds raised through the Infrastructure Renewal Rate (IRR) will be allocated towards infrastructure maintenance and renewal related to the following:

• Civil works (roads, drainage, footpaths)
• Parks and open spaces
• Shire presentation and beautification

This ensures the community benefits from well-maintained and improved public assets.

The proposed structure would take effect from 1 July 2026, following formal consultation and adoption as part of Council’s 2026/27 Operational Plan.

Council will provide timelines and detailed information through its website, newsletters, and public notices before the new structure comes into effect.

In this context, equity means ensuring the rate-pegged total is shared fairly across properties as the Shire’s dwelling mix changes over time.

Because many Council assets have long lifespans and require regular renewal, Council plans for full lifecycle costs and aims to strike a balance between service levels, risk and costs with community engagement.

Council’s Asset Management Policy emphasises balancing community expectations for service levels with the community’s ability to pay, using lifecycle planning to safeguard the needs of future generations.

Council’s analysis indicates multi-unit dwellings currently contribute less on average toward the net cost of services funded through general purpose revenue, placing a disproportionate burden on single-unit dwellings.

Based on current rating data, average rates for single-unit dwellings are $1,406, while apartments average $783. These are averages and individual outcomes vary, but they demonstrate the current imbalance at a category level. The proposed structure is designed to correct that imbalance by rebalancing contributions within the residential category, so the costs of shared services and infrastructure are distributed more evenly and sustainably over time.

The new structure will:

• Distribute the cost of community services more evenly
• Acknowledge that many apartments have high market values despite lower land values
• Better reflect actual usage, demand and growth.

The objective is not for an apartment to pay the same as a standalone house; it is to reduce the current imbalance and ensure contributions are more equitable overall as the Shire’s dwelling mix changes over time.

The Infrastructure Renewal Rate is proposed as an ongoing Special Rate to fund infrastructure renewal.

Council will review its rating structure annually, and any changes will involve community consultation.

Council’s analysis indicates multi-unit dwellings currently contribute less on average toward the net cost of services funded through general purpose revenue than single-unit dwellings.

The proposed structure is designed to rebalance contributions between dwelling types within the residential category. Because the policy intent is to correct a category-level imbalance in how the (rate-pegged) total is shared, multi-unit dwellings are expected to increase overall under the proposed structure.

This does not mean every multi-unit dwelling will increase by the same amount. The size of the change will vary depending on your property’s land value and valuation movement relative to others in the same category.

The rebalancing changes the share within the capped total; it does not increase Council’s total permissible rates income beyond the rate peg.

Council recognises that higher-density housing can use some infrastructure more efficiently, for example, more dwellings can be located closer to centres, services and existing networks.

However, the proposed changes are not based on a simple “cost per person” approach. Council’s analysis found multi-unit dwellings currently contribute less on average toward the net cost of services funded through general purpose revenue, placing a disproportionate burden on single-unit dwellings.

Many Council services and assets also operate as shared, network-based systems such as roads, drainage, footpaths, parks and public spaces that must be maintained to a consistent community standard across the Shire. All residents benefit from access to these networks, and renewal needs continue regardless of dwelling type.

Council must maintain assets to agreed service standards and manage safety risks across the Shire through routine inspections, proactive maintenance and planned renewal programs for roads and pathways, stormwater networks, parks and community facilities.

Even where higher density can reduce the need for some new infrastructure per dwelling, Council must still maintain and renew the existing public networks and assets that serve the community as a whole.

These shared networks are funded through general purpose revenue, so equity is about how the capped total is shared not charging different households based on individual usage.

The proposal therefore focuses on rebalancing contributions within the residential category, so the costs of shared services and infrastructure are distributed more evenly and sustainably as the Shire’s dwelling mix changes over time.

Rates in NSW are governed by the Local Government Act 1993, which requires councils to apply a consistent rating structure across all properties within the same category (e.g., residential, business, farmland). This means rates are determined by rating category and land value not by when the property was purchased or built.

If Council tried to charge only new apartments more, it would create two different rating systems within the same category, which would not be compliant with current legislation

The principle of fairness under rating legislation is that similar properties in the same rating category should contribute proportionally to the cost of services they receive. Both new and existing apartments benefit from the same infrastructure roads, parks, waste collection, libraries, and community facilities and both contribute to the growing demand for these services.

2021 Census data indicate average occupancy of 2.1 persons in apartments compared with 3.1 persons in houses in The Hills Shire LGA.

Council’s assessment is not based solely on household size. Council’s analysis found multi-unit dwellings currently contribute less on average toward the net cost of services funded from general purpose revenue, and the proposed structure seeks to address that imbalance.

Council does not set rates based on household size or family composition; rates are based on land value within the legislated framework.

Strata levies fund the maintenance and operation of private common property within a strata scheme (for example lifts, foyers, internal lighting, building insurance, and shared facilities).

Council rates fund public infrastructure and services available across the whole Shire, such as local roads, drainage, parks, libraries, community facilities, and shared public spaces.

While strata levies and rates both support “shared” services, they apply to different assets: strata levies apply to private common property within the scheme, while rates support Council services and public assets that benefit the broader community.

Council understands this concern. In NSW, rates are calculated using unimproved land value, which is not a direct measure of a household’s disposable income and may not correlate with a ratepayer’s cash assets. This limitation has been recognised at a sector level, including through the NSW Parliamentary inquiry process, which recommended reforms such as considering capital improved value rather than unimproved land value.

Because land value is an imperfect proxy for income, Council assessed community capacity to contribute using broader measures such as Socio-Economic Indexes for Areas (SEIFA) and Census income and occupation data. The Hills Shire has a SEIFA index of 1,098.1 and ranks among the most socio-economically advantaged LGAs. Council recognises that individual circumstances vary across the community.

Council continually reviews operations to ensure efficiency, including streamlining services, reducing overheads, and seeking grants and external funding.

Council’s Resourcing Strategy includes sustainability and cost-reduction initiatives alongside proactive maintenance and planned renewal programs across major asset classes, but renewal needs are still driven by asset condition, lifecycle requirements and agreed service levels.

Council will continue to pursue productivity improvements and service reviews, but rates remain the most stable recurrent funding source for core services and renewal.

Developer contributions (also known as Section 7.11 or 7.12 contributions) are payments made by developers when new developments are approved. These contributions are used to fund new infrastructure required because of growth, such as roads, parks, playgrounds, drainage systems, and community facilities. They are generally allocated to capital works projects that support the additional population created by new developments.

However, developer contributions do not cover ongoing maintenance or day-to-day services. They cannot be used for things like waste collection, park mowing, road repairs, library operations, or community programs. These ongoing costs increase as the population grows, and they are funded through rates.

Rates ensure that all residents, whether in new developments or existing homes, contribute fairly to the cost of maintaining infrastructure and delivering essential services across the Shire. While developer contributions help build new facilities, rates keep them operating and maintained for the entire community.

Council will undertake community consultation before implementing any changes. This includes:

• Public notices
• Online consultation page and survey
• Opportunities for feedback and discussions via drop-in sessions
• Newsletters promoting the above
• Social media posts promoting the above.

You can make a contribution and have your say during the consultation period by:

• Completing the online survey on the have your say page
• Sending a written submission via post. Details will be provided in the public notice and on our website.

If you’re having difficulty paying your rates, please contact Council as soon as possible. We can offer:

• Flexible payment arrangements to spread payments over time.
• Access to Payble, a service that allows bill smoothing, so you can break your rates into smaller, more manageable payments.
• Information on hardship applications that may apply to your situation.

Council applies the statutory Government Rebate, which provides a rebate on ordinary rates and domestic waste charges of up to $250 for eligible pensioners. It also provides a voluntary rebate of up to $125 for War Widows. Contact Council to confirm your eligibility and apply.

Land values are set independently by the NSW Valuer General. Council cannot change these valuations and must use them to calculate rates under NSW legislation.

Your land value will be shown on your rates notice or you can contact the NSW Valuer General.

Contact Details for the NSW Valuer General:

• Phone: 1800 110 038
• Website: www.valuergeneral.nsw.gov.au
• Email: valuationenquiry@property.nsw.gov.au

If you have concerns relating to your new property valuation, you can lodge an objection online with the Valuer General or contact them on:

• Phone: 1800 110 038
• Website: www.valuergeneral.nsw.gov.au
• Email: valuationenquiry@property.nsw.gov.au

If the Valuer General amends your land valuation, they will advise Council of the new valuation relating to your property and if required your rates will be amended.