Rural property values up 74 per cent since 2020: driving up rates and FSPL

Farm values have skyrocketed 74 per cent in three years. See how much your rates have jumped and how much you’re paying the struggling FRV in levies.

The value of grain properties in Hindmarsh have risen 166 per cent in three years, Buloke 145 per cent, Ararat 126 per cent, with Yarriambiack, Gannawarra and Horsham up 119 per cent.

The rural property boom has lifted the capital improved value of Victorian farms by a massive 74 per cent in just three years - from $133 billion in 2020 to $231 billion in 2023.

A breakdown by shire of Valuer-General data shows properties in the grain belt made some of the highest gains in the state, more than doubling since 2020, with Hindmarsh farm values up 166 per cent; Buloke, 145 per cent; Ararat, 126 per cent; and Yarriambiack, Gannawarra and Horsham up 119 per cent.

Tree-changers pushed rural property values up by 120 per cent in the Alpine Shire, 96 per cent in South Gippsland and 100 per cent in the Pyrenees shires.

But higher property values have simply meant higher costs for most farmers, with some municipal councils raising rural rates by more than 40 per cent over three years.

Meanwhile Treasurer Tim Pallas has lifted the fire services property levies farmers pay by even more, to help fund the state’s massive blowout in the cost of running Fire Rescue Victoria and the CFA.

Analysis of Valuer-General data and FSPL rates show farmers, many of whom are CFA volunteers, are paying 58 per cent more in levies on their property values today than in 2020, plus a fixed charge.

At the same time interest repayments on farm loans are on the rise and livestock prices have collapsed, with the Reserve Bank of Australia’s rural commodity index (in Australian dollars) slumping from 116.4 in May last year to 81.8 in September.

The Value-General’s data shows that in Hindmarsh Shire the 166 per cent jump in rural property values, from $1.285 billion in 2020 to $3.42 billion in 2023, lifted the share of rate revenue it collects from farming families from 75 per cent to 84 per cent today.

Further north Mildura Rural City Council has jacked up its rural rate collections by a staggering 38.5 per cent in three years, despite the Victorian government imposing a Fair Go Rates Cap that was meant to cap annual increases to 1.5 per cent in 2021-22, 1.75 per cent in 2022-23 and 3.5 per cent in 2023-24.

In 2020-21, dryland farmers across the Mildura shire were paying $4.175 million in rates, while those on irrigated properties handed over $6.223m – total of $10.4m. This financial year those same dryland farmers must hand over $6.453m in rates and irrigators $7.947m – a total of $14.4m, an increase of 38.5 per cent since 2020-21.

Tempy farmer Leonard Vallance said there was more bad news to come as “there’s been a massive rise in the price of land this year” across the Mallee.

Farmers in nearby Swan Hill Rural City Council are feeling just as much pain, with this financial year’s rural rates up 43.5 per cent on what the council collected in 2020-21.

Manangatang grain grower Christine Plant said her latest Swan Hill Rural City Council rates and FSPL bill was up 31 per cent this year alone, as different parcels of the family’s land rose in value from 21.4 per cent to 128 per cent.

“It seems very unfair that our rates have increased so much mainly because of the small number of assessments (that are used to calculate the increase),” Ms Plant said.

“The increase in rates is a lot lower in the larger towns, Swan Hill (1.7 per cent) and Robinvale (3.3 per cent), as there are many more properties to share the increase.

“Farms are contributing so much more money to services in these larger towns that realistically they do not access as frequently as town residents.”

As for the FSPL hike, Ms Plant said it “seems unfair that CFA volunteers pay full levy and then spend significant time away from their families and businesses completing training and fighting fires”.

In 2020 Victorian farmers paid a FSPL of 19 cents per $1000 on the capital improved value of land worth $133 billion – a total of $25.27 million – plus a fixed charge of $230 each.

This financial year rural landholders will pay 16.9c/$1000 of CIV, but on $231 billion of land – a total of $39m – plus a fixed charge of $254.

In contrast Treasure Tim Pallas has eased the FSPL burden on businesses in cities and towns by lifting the revenue collected by only 8 per cent over the past three years.

While the Valuer-General’s data shows farmers’ FSPL contributions have risen in the past three years, Mr Pallas’ office said: “The levy’s variable rates for primary production land and regional residential properties have decreased significantly since it was introduced in 2013.”

But in 2013-14 the total value of rual properties in Victoria was just $97.9 billion, compared to $231 billion today.

Mr Pallas’ state budgets also show FSPL collections have risen from $610m a decade ago to $847m this financial year, growing to almost $900m by 2026-27.