A GREATER portion of rates will be raised from residential properties if the Launceston City Council follows the state government's endorsement of a switch to a capital value rating system.
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Councils are not obligated to follow this recommendation from a four-year review on local government rating systems.
The review recommended land valuations every two years and capital valuations every four years.
Launceston will soon consider whether it will discontinue AAV valuations by 2016.
The council's corporate services director Michael Tidey last week told a public budget information session that the benefits of a capital valuation system recognised a property owner's capacity to pay, though not their income potential, and was easier to determine than the AAV system.
But he said it could increase rate-setting costs to the council and increase rates for high-valued residential properties.
The rise could be softened overall if a differential rate standard was applied where the general rates in the dollar differs between property rates, with some property classes paying more in the dollar and others less.
A capital value rating system over AAV would see homeowners account for three-quarters of the council's overall rates revenue, above the current 63 per cent, and reduce the load for commercial property owners.
Mr Tidey said a land value rating system favoured developed properties over both, but was volatile and did not recognise an owner's income or capacity to pay.
The corporate services department has formulated maps that show rate increases for specific suburbs under different rating system scenarios on its website.
Mr Tidey reiterated the examples were indicative only of the different effects a change to rating modelling systems could potentially have in the municipality.
The council will adopt the rate rise of 3 per cent at a June 24 meeting. A residential property valued at $270,000, with an AAV of $12,116, can expect a rates bill of $1357 this coming financial year.