Andrew Barr signals further rates rebates for coming financial year

The ACT government will push ahead with a 3.75 per cent rates increase from July but some households may be offered a reprieve on the full amount.

Mr Barr has indicated the government was inclined to offer further rebates but he stressed a final decision had not been made.

"The issue the government will consider is whether we will continue some form of rebate whilst the pandemic continues," Mr Barr said in an interview with The Canberra Times.

"I think we're leaning in that direction but obviously we've got a few more budget rounds to go through before we reach a conclusion on that."

Mr Barr, who is also the ACT Treasurer, is set to release the annual residential rates figures for 2021-22 for Canberra homeowners next month, showing the increase for each suburb.

Last year, Mr Barr announced residential rates rises would slow to an average of 3.75 per cent a year over the next five years as part of the third stage of the government's major tax reforms.

The total value of rates revenue collected by the ACT government will rise by 3.75 per cent, but the increase does not have to be distributed evenly between rate-paying households.

Rates hikes are generally tied to increases in land values, which vary from suburb to suburb.

Last year, the territory government offered a $150 rates rebate to households as part of its coronavirus economic stimulus package.

The actual rates increase for households for the year either fell or increased at lower rate than previous years.

The $150 rebate coupled with the lower 2020-21 rates increase meant rates bills fell for about 110,000 Canberra households this financial year.

Rates increased for about 60,000 households but the rise was offset by the rebate. About 36,000 households paid a higher amount in rates than the previous financial year, despite the rebate.

As many households did not pay higher rates this financial year any increase next financial year would be higher than 3.75 per cent. For this reason, Mr Barr said the government would consider a transition.

"If there's no rebate then 3.75 plus [per cent], on top of the unrebated level is more than 3.75 [per cent] so that gives you a sense that there's likely to be a further transition out of the rebate," he said.

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Last year's budget update indicated that further rates rebates may be needed due to the coronavirus pandemic.

"The government remains aware that depending on the economic circumstances at the time, rebates similar to the $150 rebate applied for the 2020-21 general rates may need to be considered," budget papers said.

The ACT government embarked on major tax reform in 2012 to phase out stamp duty from the territory. To compensate for the loss in revenue the government has introduced higher marginal tax rates for residential and commercial property owners.

The government has planned to deliver the program in four five-year blocks. The 3.75 per cent annual rise is the third phase, it was brought forward one year.

Mr Barr has also signalled his intention to target the burgeoning build-to-rent sector and institutional investors, including industry superannuation funds, in an effort to ease the ACT's housing crisis.

There was capacity to add build-to-rent requirements on top of current government targets for affordable housing, and projects with institutional investment could add 200 to 300 properties to the rental market at a time, he said.

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