TasFarmers Matters - Poor value in council ‘tax’

Local government rates are one of the most misunderstood pieces of taxation. It is one of the few taxes in Australia which levies money on assets, rather than income or profit.

While they are imposed by your local council, the critical element is determined by the state government.

This is the Annual Assessed Value (AAV), which sets the base level at which councils then charge their rate.

This AAV is set at 4 per cent of your property’s value, as determined by the Tasmanian Valuer General.

The Valuer General’s office revalues properties every six years.

In recent years, this has seen a massive spike in rate demands to farmers in several municipalities, such as Latrobe, Tasman and Dorset, entirely due to these re-valuations

This year, 2026, will see new valuations taking place in many of our prime agricultural districts: Break O’Day, Brighton, Burnie, Central Coast, Circular Head, Clarence, George Town, Meander Valley and Northern Midlands.

In late 2025, farmers in some of these municipalities received a survey, demanding precise information regarding their farm businesses, far more in-depth than has ever been sought before.

This can only be leading to one thing, dramatic increases in rates that farmers will be expected to pay.

TasFarmers have been making the point for quite some time on behalf of our members – the system of determining municipal rates in Tasmania is broken.

The 4 per cent AAV is meant to reflect the amount the owner would receive if the property was rented out.

For some farmers, if they could get 4 per cent of the property value, they’d most likely rent it out and head for the beach.

The 4 per cent figure probably works for a residential property in the suburbs of Hobart, as 4 per cent of $750,000 gives an AAV of $30,000, which is about $575 a week in rent – Hobart’s median rent as it turns out.

That’s a lot, but the numbers at least make sense, if not the affordability.

Your average commercial farm might have a value of $7,000,000, which according to the state government, means you could be getting $280,000 a year in rent - $5,384 a week.

Which of course is ridiculous.

As we’ve discussed before, the final amount the council charges farmers for their rates is further determined by a “cent in the dollar” calculation.

If we use one of the municipalities set to be re-valued, such as Burnie, who multiplies the 4 per cent AAV by 0.078 cents in the dollar, your rates on a $7 million farm are currently $21,824, give or take a few dollars.

Given your farm at $7 million hasn’t been re-valued for six years, you might be in for a shock this year.

At even only a 5 per cent increase in value per year over six years compounded, your $7 million farm now might have a paper value of $9.38 million.

Your rates just went up to $29,579.

Have you had an extra $7,800 value from your council? Each year? Tax on an unrealised capital gain anyone?

This comes along with uncertain weather patterns, price pressures to supply more for less, costs increasing exponentially, and red tape getting worse, not better.

The song remains the same, as Led Zeppelin told us back in the 1970s.

But we desperately need a different tune from our state government.

The only way to properly resolve this issue and take some of the financial pressure off our productive agricultural sector is to reduce the AAV from 4 per cent to 2 per cent for primary producers.

The reality of 29 councils fixing this together is zero.

But the state government can fix this with a stroke of the pen, the change to a regulation and the adoption of a policy that will make a huge difference to our productive ag sector.

Let’s face it, with our major industrials all on their knees with only government support keeping them here, agriculture is the only sector that can sustainably take this state forward and grow our economy.

But it won’t if the system continues to syphon any hope of financial success away through unjust local government rates, and if the government thinks that all TasFarmers and its members will do is write the occasional editorial, think again.