A Victorian council works out a property’s general rates by multiplying its valuation by a rate in the dollar that the council sets. The valuation comes from the Valuer-General and is made as at 1 January, and notices carrying it typically arrive between July and September.
General informationThis page explains how Victorian rates are worked out. It is not financial or legal advice about any notice. Questions about a notice go to the council that issued it, whose contact details are printed on the notice. The Valuer-General’s page on objecting to a rating valuation is the official guide to challenging one.
From 1 January to the notice
- 1 January
Every rateable property is revalued each year with this valuation date. The figure, also called a statutory valuation, is meant to reflect fair market value on that day.
- The valuation
Certified practising valuers make it for the Valuer-General, under the Valuation of Land Act 1960 and the Valuation Best Practice Specifications Guidelines, the legislated framework that sets valuation methods across the state.
- The budget
Each council decides in its budget how much revenue it needs and how much of it to raise through rates, and must engage its community on those decisions.
- The rate in the dollar
The amount to be raised in general rates, divided by the total value of all rateable property in the municipality, gives the council’s rate in the dollar.
- July to September
Rate and valuation notices typically go out, showing the valuation as at 1 January of that year.
The valuation used is either the capital improved value or the net annual value. Capital improved value counts the land, the buildings and any other capital improvements. A council may also set different rates in the dollar for different classes of property, such as residential, rural or commercial land.
A worked example
| General rates the council plans to raise | $40,000,000 |
| Total capital improved value of rateable property | $16,000,000,000 |
| Rate in the dollar: $40 million ÷ $16 billion | 0.0025 |
| One property valued at $800,000: $800,000 × 0.0025 | $2,000.00 |
Now suppose the next year’s valuations rise 4% across the whole municipality and the council raises the same $40 million. The total becomes $16.64 billion and the rate in the dollar falls to about 0.0024038. The same property, now valued at $832,000, pays $2,000.00 again. A neighbouring property whose value rose 10% instead, from $800,000 to $880,000, pays about $2,115.38.
That is the point the Local Government Victoria pages make: rates are shared out by each property’s value relative to all the others in the municipality, so what moves a bill is a property’s change in value against the rest, together with any change in the rate in the dollar. It is also why two properties of similar value in different municipalities can be charged different amounts.
The other lines on a notice
- The Emergency Services and Volunteers Fund levy. Councils collect it with the rates on behalf of the State Revenue Office. It was formerly the Fire Services Property Levy, the name Local Government Victoria’s calculating page still uses.
- Service rates or charges, which many councils apply for purposes such as collecting and disposing of waste.
- A municipal charge, a flat amount towards administration. The total it raises cannot exceed 20 per cent of what the municipal charge and general rates raise together.
- Special rates or charges for particular works or services; the examples given are footpaths, roads, drains, and kerbs and channels.
What the rate cap limits
Victoria has capped the yearly growth in councils’ rate revenue since 2015. The Minister for Local Government sets the cap each year, working from the forecast Consumer Price Index and advice from the Essential Services Commission. The Essential Services Commission gives the cap as 2.75 per cent for the 2026–27 financial year as at its page read on 9 October 2026, after 3.00 per cent for 2025–26. The same page shows that Glen Eira City Council has an approved higher cap of 5 per cent for 2026–27.
The cap applies to a council’s total rate revenue, not to any one property, so a single bill can rise or fall by more or less than the cap as valuations move. It covers the general rate and municipal charges only; waste charges and other user fees and levies sit outside it. A council can ask the Essential Services Commission for a higher cap if it can show community support and a critical need for the spending.
When the rules last changed
The rating system itself has its own dates. A panel appointed in 2019 reviewed it, and its final report made 56 recommendations, of which the Victorian Government supported 36 in part or in full. The Local Government Legislative Amendment (Rating and Other Matters) Act 2022 followed, receiving Royal Assent on 9 August 2022.
Objecting to the valuation
An owner who disagrees with the value on a council rates notice or a land tax assessment notice can object. The objection goes to the body that issued the notice: the council for rates, and the State Revenue Office for land tax. The Valuer-General sets out three requirements. The objection must:
- be in writing
- be lodged within 2 months of the notice being given, in most instances
- state the grounds for objecting.
The issuing council can explain how to lodge, and objections to a council valuation can also be made online through the Objections Portal. Councils supply pro-forma objection forms; where that is not possible, the Valuer-General offers generic versions for residential, rural and commercial or industrial property. Using the pro-forma keeps an objection in line with the Valuation of Land Act 1960 and helps pin down the points in dispute with the council valuer. Completed forms go to the council that sent the notice, not to the Valuer-General.
The Valuer-General also points to the sections of the Act that govern the process: section 16 on who may object, 17 on grounds, 18 on the time limit, 21 on how objections are dealt with, and 22 on appeals.