Rates (tax)
Rates are a type of property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...

 system in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

, and in places with systems deriving from the British one, the proceeds of which are used to fund local government
Local government
Local government refers collectively to administrative authorities over areas that are smaller than a state.The term is used to contrast with offices at nation-state level, which are referred to as the central government, national government, or federal government...

. Some other countries have taxes with a more or less comparable role, for example France's taxe d'habitation.


Local government levy rates usually called council or shire rates on property based on the nominal rental value of the property. The value is called gross rental value and is calculated by the land authority or agency.

Hong Kong

In Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, rates
Rates in Hong Kong
- Introduction :Unless specifically exempted under the Rating Ordinance , all properties in Hong Kong are liable to rating assessment, with rates payable at a specified percentage of the rateable value assessed on the property...

 on property is based on the nominal rental value of the property. Unlike in England and Wales, it is still levied on domestic property as well as non-domestic premises. Prior to 2000, it was used to fund municipal services, responsible by the now-abolished Urban Council and Regional Council, through the Urban Services Department
Urban Services Department
Urban Services Department was a government department in Hong Kong. It carried out the policies and managed the facilities of the former Urban Council.After being abolished with the Urban Council in 1999, its functions were inherited by the Food and Environmental Hygiene Department and the Leisure...

 and Regional Services Department
Regional Services Department
Regional Services Department was a government department in Hong Kong. It carried out the policies and managed the facilities of the former Regional Council...

. The revenue now goes to the treasury. The bill is issued quarterly.


The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...

 has a similar tax known as arnona that goes back to the days of the British Mandate of Palestine. It is levied by the municipality (or, in smaller localities, by the moatza eizorit, i.e., Regional Council) based (currently) on the square meterage of dwelling or business. Specific rates vary widely among municipalities, with Jerusalem and Rehovot
Rehovot is a city in the Center District of Israel, about south of Tel Aviv. According to the Israel Central Bureau of Statistics , at the end of 2009 the city had a total population of 112,700. Rehovot's official website estimates the population at 114,000.Rehovot was built on the site of Doron,...

 having the highest rates in the country. In rental dwellings, tenants (rather than owners) generally pay the arnona. Single parents and some forms of economic hardship qualify for discounts or even exemptions.

New Zealand

Numerous Rating Acts and their amendments have sustained Territorial Authorities of New Zealand
Territorial authorities of New Zealand
Territorial authorities are the second tier of local government in New Zealand, below regional councils. There are 67 territorial authorities: 13 city councils, 53 district councils, and the Chatham Islands Council...

 for over a century. Rental value is not the commonest criterion: land value and improved value have been more commonly used. Many exceptions are provided in legislation to reduce perceived unfairness of whichever system the council is using.

United Kingdom

The modern system of rates had their origin in the Poor Law Act 1601, for parishes to levy rates to fund the Poor Law
Poor Law
The English Poor Laws were a system of poor relief which existed in England and Wales that developed out of late-medieval and Tudor-era laws before being codified in 1587–98...

, although parishes often adopted property rates to fund earlier poor law measures. Indeed, the Court of Appeal in 2001 called the rating an "ancient system", suggesting that it had medieval origins. In the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

, rates on residential property were based on the nominal rental value of the property, the value being reassessed periodically in revaluations. By the Rating and Valuation Act 1925, revaluations were supposed to take place every five years but in practice they were frequently delayed or suspended. Revaluations took place in 1928/1929, 1934, 1956 (but based on 1939 values), 1963, and 1973. A revaluation due in the early 1980s was scrapped by the Secretary of State for the Environment Michael Heseltine
Michael Heseltine
Michael Ray Dibdin Heseltine, Baron Heseltine, CH, PC is a British businessman, Conservative politician and patron of the Tory Reform Group. He was a Member of Parliament from 1966 to 2001 and was a prominent figure in the governments of Margaret Thatcher and John Major...

 in June 1979, with Heseltine urging householders to tear up the forms already sent out by the Valuation Office.

Whilst still levied in Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...

, they were generally abolished in Scotland in 1989 and England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...

 in 1990 and replaced with the Community Charge
Community Charge
The Community Charge, popularly known as the "poll tax", was a system of taxation introduced in replacement of the rates to part fund local government in Scotland from 1989, and England and Wales from 1990. It provided for a single flat-rate per-capita tax on every adult, at a rate set by the...

 (so called "poll tax"), a fixed tax per head that was the same for everyone. This was soon replaced with the Council Tax
Council tax
Council Tax is the system of local taxation used in England, Scotland and Wales to part fund the services provided by local government in each country. It was introduced in 1993 by the Local Government Finance Act 1992, as a successor to the unpopular Community Charge...

, a system based on the estimated market value of property assessed in bands of value, with a discount for people living alone.

, domestic properties in Northern Ireland have moved to a rateable value based on the capital value of properties (similar to the Council Tax) as they stood on 1 January 2005; non-domestic properties are still rated based on their rental value. Non-domestic properties are currently being revalued, so a new list with 2008 values will come into effect in 2010.

The Crown Estate Paving Commission
Crown Estate Paving Commission
The Crown Estate Paving Commission is the body responsible for managing certain aspects of the built environment of Regent's Park, London. It was established by statute in 1824. It fulfills local government functions, and is one of the few bodies in the United Kingdom still empowered to levy...

 still levies rates on residential property within its jurisdiction, in the area of Regent's Park
Regent's Park
Regent's Park is one of the Royal Parks of London. It is in the north-western part of central London, partly in the City of Westminster and partly in the London Borough of Camden...

, London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

, under the provisions of the Crown Estate Paving Act 1851.

Rates on non-residential property (business rates
Business rates
Business rates is the commonly used name of non-domestic rates, a tax on the occupation of non-domestic property. Rates are a property tax with ancient roots that was formerly used to fund local services that was formalised with the Poor Law 1572 and superseded by the Poor Law of 1601...

) are still charged, at a uniform rate set by central government. Rates are collected by local councils, but the moneys collected are distributed nationally according to population.

Rating assessments (rateable values) are made on all non-domestic properties. As well as business, this includes village hall
Village hall
In the United States, a village hall is the seat of government for villages. It functions much as a city hall does within cities.In the United Kingdom, a village hall is usually a building within a village which contains at least one large room, usually owned by and run for the benefit of the local...

s and other non-business occupations. The exception to this is where a hereditament is exempt by virtue of Schedule 6 of the Local Government Finance Act 1988 which specifies exempt classes.

The rateable value should represent the reasonable rental value of the occupation according to the circumstances at the "Material Day" and according to rental values at the "Antecedent Valuation Date". (For the compiled 2005 Rating List the "Material Day" is 1 April 2005 and the "Antecedent Valuation Date" is 1 April 2003).

Later physical changes will have a later Material Day but the Antecedent Valuation Date will still be 1 April 2003 for the currency of the 2005 Rating List. The Rating List is a public document.

United States

Real estate taxes which are based on a percentage of the property's actual or nominal value are the prime funding method for local government.
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