Differential rates

Not all properties are the same - so not all rates are either. The differential rates model is a mechanism for Council to be able to differentiate between properties and property types.
 

Council uses a differential rating model, which means:

• Different types of properties (residential, commercial, industrial, mining, etc.)
• Pay different rates in the dollar
• Based on their use, impact on services, and capacity to pay

Council provides a wide range of operations and services to the community, including maintaining roads and footpaths, recreational facilities, parks, libraries, waste management, major infrastructure projects and community programs.
 

You pay rates based on:

• Your property’s gross rental value (GRV)
• The type of property you own
• The rate in the dollar (RID) set by Council

As part of the yearly budget process, we calculate the Rate in the Dollar (RID) by dividing the total amount of money to be raised in general rates by the total value of all rateable properties. The resulting figure is the Rate in the Dollar.

Rates form part of the City’s wider budgeting process. Before the rating model is set, the Administration calculates the cost to run the City, including essential maintenance, asset renewals, and projects outlined in the Council Plan. Funding from other sources such as grants and investments are applied and the remaining amount that rates will be levied for.

Individual rates are determined by two components:

• Your property’s value (GRV or UV) – which is set by Landgate

• The Rate in the Dollar – set annually by Council

Your rate is calculated my applying the Rate in the Dollar to the GRV

Rates can increase if your property increases in potential rental value faster than others in your area. For example, if you make improvements to your home that increase its rental value then your share of rates will increase. This is determined by the Valuer Generals Office and is referred to as Gross Rental Value (GRV).
 

Rates are also affected by changes made by other government sectors. If the state government increases fees for power and water, or adds street lighting (for example), that increase in cost will need to be met by councils.
 

Rates are also influenced by the City’s Long Term Financial Plan projections which are based on delivering on community priorities and environmental factors including inflation and increasing costs to run a business.
 

Your rates can increase if Council’s budget for the year results in additional funding required to provide local services, facilities or new initiatives.

Last year was a revaluation year. Landgate updated property values, which affects how much you pay - but not necessarily the City’s overall revenue.

The Buy Local Voucher is a targeted way to support local owner-occupiers without impacting the revenue of the entire residential rate category. Owner-occupiers make up 26% of the GRV residential category, while the remaining 74% comprises investors, State Government and large industry-owned housing. By delivering support through the voucher program, Council can directly benefit local residents and families while maintaining a fair and sustainable approach to rates for the broader residential category.

No. Rates are not directly linked to movements in the property market. The value of your property in comparison with your neighbours forms part of a formula to calculate rates, along with RID, required revenue and funding sources.

The three percent increase for residential properties represents an average increase of $70.01 per annum, or $1.35 a week. Owner-Occupiers also receive a $100 Buy Local voucher as part of the City’s support initiative.

For the 2026/27 financial year, properties valued using the Unimproved Value (UV) method, including Pastoral and Mining/Other, will increase by 6%, while Strategic Industry will be increased by 7.5%. While major industry contributes through rates and other economic activity, the City must apply rates in line with valuation categories to create a fair and balanced distribution across all ratepayers.

We understand cost of living pressures are a real concern for the community, and this has been carefully considered in developing the rates model.
 

Each year, the City reviews its budget, services, and all available revenue sources, including investments, to minimise the impact on ratepayers while still delivering essential services.
 

Council has also endorsed a $100 Buy Local voucher for Owner-Occupiers which will offset the rates increase, while at the same time supporting the local businesses that are the backbone of our community.

While Port Hedland is geographically close to Karratha, its rating structure is materially different. For 2025/26, the Town of Port Hedland has a single category, UV Mining, which contributes $65,400,331 to its total rates yield of $88,547,940.
 

This means the Town has relatively low reliance on its GRV Residential category because of the substantial revenue generated from UV Mining.
 

By comparison, in the same year the City of Karratha has a total rates yield of $66,472,046 across a larger number of properties, with the equivalent UV Strategic Industry category contributing $22,954,767. This results in the Town of Port Hedland having approximately $22 million more in rates revenue available to meet its operational costs.

The City acknowledges the potential impact of differential rate increases on commercial property owners, tenants and small business operators.
 

Council recognises that operating costs in the Pilbara are already elevated and that any increase in rates may contribute to broader cost pressures within the local economy. In developing the proposed rates model, the City has sought to balance affordability with the need to maintain essential community infrastructure, regulatory services and economic development initiatives that support both residents and local businesses.

The City of Karratha does hold reserve (surplus) funds in term deposits. However, these funds are held for expenditure on long-term capital and asset renewal projects for key assets, such as:

• Red Earth Arts Precinct
• Karratha Leisureplex
• Airport
• Waste Facility
   

Over the next four years, the City is planning:

• $100+ million in new and upgraded capital works (sporting facilities, roads, etc.)
• $50+ million in capital renewal projects

The reserve of funds for capital and asset renewal projects is required by legislation and cannot be used to off-set City rates.

The City of Karratha does hold reserve (surplus) funds in term deposits. These funds are held for expenditure on long-term capital and asset renewal projects for key assets, such as:

• Red Earth Arts Precinct
• Karratha Leisureplex
• Airport
• Waste Facility

Over the next four years, the City is planning:

• $100+ million in new and upgraded capital works (sporting facilities, roads, etc.)
• $50+ million in capital renewal projects

The reserve of funds for capital and asset renewal projects is required by legislation and cannot be used to off-set City rates.
 

Council does proactively seek funding from other sources, with rates only making up 33% of the City’s revenue compared to other local governments such as Town of Port Hedland where rates makes up 71% of revenue.

We understand cost of living pressures are a real concern for the community, and this has been carefully considered in developing the proposed rates model.
 

Each year, the City reviews its budget, services, and all available revenue sources, including investments, to minimise the impact on ratepayers while still delivering essential services.

The City of Karratha recognises that the current Gross Rental Value (GRV) system does not always reflect the unique conditions of our region.
 

While GRV is set independently by the WA Government’s Landgate and must be applied by all local governments in Western Australia, the City is continuing to advocate for change to a more equitable model for the Pilbara.
 

We have formally raised our concerns with the Valuer General highlighting the issues with the rating model in the Karratha context and calling for a more balanced and equitable solution for Pilbara residents.

Mining and resources companies all pay rates. Given this, resource-related contributions are spread across multiple categories in the rates model. This is because resource companies often have a presence across operational facilities, accommodation villages, airport-related infrastructure, and/or strategic industrial land holdings.
 

This includes:

• GRV Commercial/Industrial
• GRV Airport/Strategic Industry
• GRV Transient Workforce Accommodation
• UV Strategic Industry
• UV Mining/Other

This would be covered under the Emergency Services Levy (ESL.) ESL charges are a State Government initiative and are collected by local governments on behalf of the State. The ESL is separate to City rates and helps fund emergency services across Western Australia. As part of its normal operations, the City also conducts pre-cyclone clean-up activities ahead of cyclone season, as well as recovery works following cyclone events.