Rate Rebates for Community Housing Providers

Local government councils are beginning to prepare budgets for the upcoming 2021/22 financial year. In preparing their budgets, it is important for councils to turn their minds to which ratepayers will – and will not – be entitled to rebates of rates. In particular, councils should ensure that ‘mandatory’ rebates are only applied with respect to land which actually meets the relevant legal conditions for the rebate.

One circumstance which, in our experience, requires particular scrutiny is the granting of rebates with respect to land used by community service providers. We consider that it is an opportune time to make certain observations about the eligibility of community housing providers to receive rebates of rates.

Eligibility criteria

Section 161(1) of the Local Government Act 1999 (SA) (the LG Act) sets out the following ground upon which a person or body may (either on application, or at the initiative of the council) receive a rebate of rates under the LG Act:

The rates on land being predominantly used for service delivery or administration (or both) by a community service organisation will be rebated at 75 per cent (or, at the discretion of the council, at a higher rate).

A body is a ‘community service organisation’ for the purpose of section 161(1) of the LG Act if all three of the conditions set out in section 161(3) of the LG Act are met. Section 161(3) of the LG Act provides as follows:

For the purposes of this section, a community services organisation is a body that—

(a) is incorporated on a not-for-profit basis for the benefit of the public; and

(b) provides community services without charge or for a charge that is below the cost to the body of providing the services; and

(c) does not restrict its services to persons who are members of the body.

This ground for a rebate can indeed be engaged in circumstances where a community housing provider registered under the Community Housing Providers National Law (CHPNL) provides supported accommodation on the relevant land.

However, it is important to note that just because a community housing provider is registered under the CHPNL, this does not mean it is necessarily a ‘community service organisation’ for the purposes of section 161(1) of the LG Act.

We emphasise that only where a community housing provider satisfies all three of the conditions in section 161(3) of the LG Act, will it be a ‘community service organisation’ for the purpose of section 161(1) of the LG Act.

Whether an entity is registered under the CHPNL is, under the LG Act, relevant to the question of whether the entity provides ‘supported accommodation’ (which is a type of ‘community service’). However, it does not automatically follow that the entity is a ‘community service organisation’ under the LG Act.

Granting rate rebates

It is ultimately a matter for councils to determine whether they are satisfied that any ground for the provision of a rebate is made out. Should a council be unsatisfied that a ratepayer meets the requirements for a rate rebate, it may seek evidence from the ratepayer to support its application.

In the case of a proposed rebate under section 161(1) of the LG Act, with respect to land used by a community housing provider, a council can request evidence such as the constitution and objects of the relevant entity, its registration under the CHPNL (including any conditions), information regarding its activities generally, and information regarding its activities on the particular piece of land in question.

It is important that the council is clear about the necessary enquiries which should be made. For example, rather than enquiring whether the entity merely conducts itself for the benefit of the public, it is instead relevant to examine whether the entity is “incorporated” for the benefit of the public.

Where a community housing provider meets the criteria under section 161(3) of the LG Act to be a community service organisation, the ratepayer will also need to satisfy the council that the ‘predominant use’ of the rateable land is for service delivery or administration (or both) by that community service provider. Determining the ‘predominant use’ of a piece of land is a question of fact and degree. Councils should also consider whether it is possible to separate any piece of land into a part which does meet the criteria for a rebate, and a part which does not.

Councils should ensure that ratepayers are given a reasonable opportunity to provide evidence before the council determines any application for a rebate.

For more specific information on any of the material contained in this article please contact Dale Mazzachi on +61 8 8210 1221 or dmazzachi@normans.com.au, Chris Alexandrides on +61 8 8210 1299 or calexandrides@normans.com.au, or Thomas Tagirara on +61 8 8217 1337 or ttagirara@normans.com.au.