Australia’s tax system uses the payment of taxes to fund a variety of programs, services and infrastructure by all levels of government for the public benefit of all citizens.
Council rates are a property tax. Nationally, council rates raise 3.6 per cent of taxes collected by all levels of government.
Rates are paid by all property owners within a municipality to help pay for more than 100 services provided by councils, and maintain local roads, council facilities and public open spaces such as parks and gardens.
Councils use property values as the basis for calculating how much each property owner pays in rates.
In Victoria, council rates can comprise up to three components:
- municipal charge (of not more than 20 per cent of a council’s total rates revenue)
- waste management (garbage) charge
- rate in the dollar.
Exemptions from rates apply to crown land, charitable land, land used for religious purposes, and land used exclusively for mining or forestry.
There is no direct connection between the amount of rates paid by a property and the level of council services received. Many services are provided for the benefit of all community members, but it is up to individuals as to the services they use and access.
Waste charges and the Victorian Government's fire services property levy are then added to your general rates to determine the total amount you will pay on your rates notice.
Council rates data
Prior to the State Government introducing rate capping in 2016, the Municipal Association of Victoria undertook an annual survey of predicted rate increases for all Victorian councils.
Find out more about Victorian council rates data from 2003 – 2015.
Victoria has more than 3 million properties valued at $2.3 trillion. Local government uses property values to apportion the council rates payable for each individual property.
An increase in property values does not cause a rate rise. Council budgets are pre-determined to meet expenditure requirements, and include any potential rate rise.
Property valuations are revenue neutral for councils – increased property values do not increase the amount of money a council collects in rates.
The property value is used to apportion the amount of rates paid by individual properties. Some ratepayers will pay more and some will pay less, depending on the new value of their property relative to other properties in their municipality.
Up-to-date valuations are critical for ensuring property owners pay a fair and equitable share of rates. Only qualified valuers – professionals holding recognised tertiary qualifications and with the required practical experience – can perform municipal valuations.
Ratepayers have rights under the Valuation of Land Act 1960 to object to the valuation of their property. Objections must be lodged within two months of receiving your rates notice.
Information on how to object can be found on your rates notice. In the first instance, a ratepayer should approach their council valuation department.
Learn more about
- Fact sheet: Council rates and budget explained (Word - 333KB)
- Fact sheet: Council rates and budget explained (PDF - 173KB)
- Fact sheet: Principle of rates (Word - 266KB)
- Fact sheet: Principle of rates (PDF - 150KB)
- Information on objecting to a valuation
- Rate capping
- Council revenue
- Council budgets
- Know Your Council: Council rates and charges
- Property valuations
- Fact sheet: Legitimacy of councils and rating powers (PDF - 35.1KB).