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About rate capping

About Rate Capping video image

The Victorian Government introduced a new rate cap system that restricts how much councils can collect in rates. The Fair Go Rates system took effect from the 2016/2017 financial year. Watch the video below or read the frequently asked questions below to find out more.

What is rate capping?

The Fair Go Rates system limits the amounts Council can increase rates in a financial year. Each year the Minister for Local Government will set the rate cap for the next financial year. A rate cap of 1.75% applies for the 2022/2023 financial year.

How does rate capping work?

Before 31 December of each year the Minister for Local Government will set the average rate cap for the next financial year, which is the maximum amount councils can increase average rates. If the rate cap is insufficient to fund the provision of services and infrastructure, Council can apply to the Essential Services Commission for an increase higher than the cap. Mount Alexander Shire did not apply for a rate variation for 2022/2023.

Will my rates go up by 1.75%?

The rate cap does not apply to individual rates notices and it does not apply to waste charges or the fire services property levy. The rate cap only applies to general rates. The rate cap is applied to the average rates of Council.

The average rates are calculated by dividing total rates revenue by the number of properties in the municipality.

Individual ratepayers’ rate increase might vary from the average rate increase depending on Council’s approach to distributing rates among different types of property and the effect of property revaluations.

Do councils get more money when property values go up?

No. Accurate valuations of properties are a critical means of ensuring that property owners pay their fair share of rates. Properties with higher market value attract higher rates than properties of a lesser value. All properties were revalued as at 1 January 2022. Valuations are conducted by qualified, independent valuers.

Read more on property valuations.

How are rates calculated?

Each council takes the total rate revenue to be collected and divides it by the total value of all properties in its municipality to calculate the rate in the dollar. This ensures councils do not receive more money when property values rise. The rate in the dollar is then multiplied by the market value of each property to ensure each ratepayer contributes a fair share. Waste charges and your fire services property levy are then added to your general rates notice to determine the total amount you will pay.

Read more on how your rates are calculated.

What do my rates pay for?

Council collects rates from residents and businesses in the municipality to help fund community services and local infrastructure for our whole community to enjoy. Almost everything you see from your front gate is provided by councils. From the footpaths, roads, bridge and drains to energy efficient street lights.

We maintain the parks, gardens, sports facilities and playgrounds for everyone to enjoy. We remove your waste, immunise babies, deliver meals to the homes of older people and provide programs to support local business.

For more information on rates and budget information visit our how to pay your rates or budget pages.

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