2017 ACT budget reveals average rates increase of 7%
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2017 ACT budget reveals average rates increase of 7%

Household rates will continue to rise in 2017-18, with unit owners feeling the greatest hit amid moves by the Barr government to bring apartment rates closer to those paid for freestanding houses.

Canberra property owners will receive rates bills, on average, 7 per cent higher from this year's budget – a smaller increase than the average 9 per cent rise between 2012-13 and 2015-16, but higher than the 4.5 per cent increase announced in last year's pre-election budget.

Unit owners will feel rates pain over the coming two years.

Unit owners will feel rates pain over the coming two years.

Photo: Jay Cronan

The next annual household rates bill will be $2295 for a house, on average, and $1352 for units, not including levies.

The existing fire and emergency services levy will increase to $294 per household, up from $252.

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House owners in Canberra's south will see the biggest increase amount in 2017-18, up $414 or 10 per cent. In the city's north, average rates will be up by $319 or 11 per cent.

Woden averages will increase $203 or 8 per cent, ahead of Gungahlin at $111 or 7 per cent and Belconnen at $123 or 7 per cent.

Weston Creek house rates will increase on average by $129, or 6 per cent, Tuggeranong by $112 or 6 per cent.

As expected, unit owners will feel rates pain over the coming two years after changes passed by the Legislative Assembly in May.

From July 1, rating factors will be applied to the higher value base on the whole value of land, rather than the lower value base of the individual value of the unit.

The change will be phased in over two years and is designed to see greater equity introduced into general rates paid between houses and units.

For units, south Canberra will see the biggest increase at $315 or 24 per cent, ahead of Woden at $285 or 23 per cent and Weston Creek at $253 or 21 per cent.

Unit average rates will rise by $225 or 20 per cent in Tuggeranong, $193 in north Canberra, or 18 per cent. In Belconnen, the rise will be $193 or 18 per cent, ahead of Gungahlin with a rise of $137 or 13 per cent.

A discount for early payment of rates will be reduced to 1 per cent from July 1, down from 3 per cent and applying to property owners who pay their rates bill and emergency services levy in full by the first due date.

The government said the decrease reflects current low inflation and interest rate levels, with the change set to add $1.9 million to the budget bottom line.

Commercial ratepayers will see an average increase of 6 per cent.

From July 2018, land tax will be extended to all houses that are not the owner's principal place of residence, whether they are rented or not. Current rules see land tax only charged on residential properties that are rented or owned by a company or a trust.

This change, worth $2 million a year to the bottom line, is designed to increase the number of residential properties available for rent, and help to put downward pressure on living costs.

Chief Minister and Treasurer Andrew Barr defended the increases in rates and charges.

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"We aim to keep the lowest possible range of increases across all ACT government taxes and charges, we do also though need to provide services for a growing city so people will benefit across the board on better health services, more investment in community services.

"Those in the greatest need see a significant additional benefit from the services we are providing in this budget," he said.

Tom McIlroy is a political reporter for the Financial Review in the federal press gallery at Parliament House.