The church rate was first established in Guelphia in 1838 with the passage of the Church Rate Ordinance. The Ordinance abolished the complex system of compulsory tithes as was seen in England and Wales from the mediaeval period. Instead, the Church was to be funded with a uniform tax of 1% on the unimproved value of all freehold and leasehold land holdings across the country.
With the introduction of municipal land rates in 1845, the church rate was reformed to be charged as an additional 10% levy on the municipal rates.
In 2011/12, the church rate yielded an income of £6.68 million for the Church, and is by far it's largest source of income.
The rate is levied as an additional component of municipal land rates, which is levelled on most freehold and leasehold properties in Guelphia. In the same way that almost all exchanges of goods and services attract a Goods and Services Tax (GST) of 10%, the church rate is levied on land rates in a similar method. Initially charged at 1% of the unimproved value of the land, the church rate has remained fixed at 10% since municipal rates were introduced in 1845.
Calculating the liability for the church rate is therefore closely tied to the the amount of municipal rates payable for the same period of time. For example, where a property has a municipal rate of £83/7/- (the national average in 2011/12), the annual church rate liability would be an additional charge of £8/6/81⁄2, charged in four quarterly instalments.
References and notes
- Church Rate Ordinance (Ordinance No. 6 of 1838).