Businesses in Lismore’s inner CBD are set to receive a 20% reduction in rates, with an approximate saving of over $1700 a year.

The matter was debated by councillors at last nights’ Lismore City Council meeting, with Cr Battista amending the originally proposed 50% rate reduction to 20%.

Future rate increases for inner CBD businesses are also on a freeze, in an effort to equalise the pressures on hard-hit businesses.

The rate cut means Council will need to make up the lost revenue, so the costs will be made up by rate increases across all other rate categories, excluding farmland. 

This means that residential households will see rate increases this year and urban businesses will pay an extra $79 per year.

Lismore businesses are categorised by Council as: Inner CBD, Urban or Other. Other rate categories are Residential (including village), Residential/Village, Residential/Rural, Nimbin Business and farmland. 

The motion to decrease business rates was meant to “urgently stimulate the CBD and halt its decline and better align Business Inner CBD rates with Business Urban rates and assist in the economic stimulation of the CBD”.

During the debate, Cr Ekins argued that the rate increases for the rest of Lismore should be spread across all rate categories, including farmland, but Cr Cook argued that farmland businesses had already experienced hardship through drought and should be excluded.  

Cr Bird argued that the 20% figure was not a high enough rate cut and suggested 35%, but did not gain support from the other councillors to pass the amendment. 

The decision to cut rates comes after an ongoing debate over whether or not to introduce a Special Rates Variation (SRV) which would have seen rates increase by nearly 25%.

This week, the SRV has been finally confirmed as dead. Read: iPart finally confirms SRV is dead

Why were business rates so high?

Council’s explanation of why Inner CBD business rates were so high compared to other ratings categories was that the business rating category was split in the late 1990’s (creating Business Inner CBD, Business Urban and Business Other), and that since then, a major imbalance occurred between the increasing yearly business rates and property values. 

Business rates are also generally higher than similar businesses in other Local Government Areas (LGAs).

The below table shows the different in rates in LGAs for the year-ended 2017/18:

The categories were created to help Council introduce a new business levy on CBD property owners to help finance the implementation of security measures in the CBD including CCTV cameras. This followed a campaign from property owners and tenants on this issue.

Council’s discussion paper states “Business Inner CBD average property values increased at a much lower rate than Business Urban, even stagnating or going backwards in some cases.

"Business Urban average property values increased during this time, benefiting from the introduction of new business areas and prominent tenants (e.g. Goonellabah Shopping Centre, Bunnings, Dan Murphy’s and so on). 

“The effect of this on rates was that the Business Inner CBD properties ad valorem rate increased as the rates they paid increased by rate peg while their property values remained the same. 

“Meanwhile the Business Urban property ad valorem rates declined as their rates increased by rate peg while their property values increased above this rate. 

“This has continued to the point where in 2019/20 their ad valorem rates were $5.65 and $1.60 respectively.”

The business rate changes will be reflected in the 2020/21 Draft Operational Plan, to go on public exhibition in May and be effective from July 1.