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Rates (tax)

Rates are a type of taxation system in the United Kingdom, and in places with systems deriving from the British one, used to fund local government.

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

United Kingdom

The modern system of rates have their origin in the Poor Law Act 1601, for parishes to levy rates to fund the Poor Law, 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, rates on residential property were based on the nominal rental value of the property. Whilst still levied in Northern Ireland, they were generally abolished in Scotland in 1989 and England and Wales in 1990 and replaced with the Community Charge (poll tax), a fixed charge the same for everyone. This was soon replaced with the Council Tax, a system based on the estimated market value of property assessed in bands of value, with a discount for people living alone. As of 2007, Northern Ireland has moved to a rateable value based on the capital value of properties (similar to the Council Tax).

The Crown Estate Paving Commission still levies rates on residential property within its jurisdiction, in the area of Regent's Park, London, under the provisions of the Crown Estate Paving Act 1851.

Rates on non-residential property (Business Rates) 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 [Local Government Finance Act 1988. Sch 6]. As well as business, this includes village halls 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.

Hong Kong

In Hong Kong, rates 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 and Regional Services Department. The revenue now goes to the treasury. The bill is issued quarterly.

New Zealand

Numerous Rating Acts and their amendments have sustained Territorial Authorities of New Zealand 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.

Israel-Palestine

Israel-Palestine 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 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.