How your rates were calculated

Row of terracesCouncil determined the total amount of money required from rates in order to provide the services and infrastructure that the community needs.

This year that amount was $100,621,000* which is in accordance with the State Government’s cap on rate increases of 2.5% (which includes an allowance for supplementary valuations raised in 2015/16). 

We divided this amount by the total combined value of all rateable properties in Yarra. This produced a Rate in the Dollar figure of 0.040109.

We then took the current Capital Improved Value of each residential property and multiplied it by 5% in accordance with state legislation. This produced the Net Annual Value of each residential property. (Commercial and industrial properties are rated similarly but include an additional component.)

Council then multiplied the Net Annual Value of your property by the Rate in the Dollar to produce the amount you are required to pay in rates.

For example:

Capital Improved Value = $800,000
$800,000 x 5% = $40,000 (Net Annual Value)
$40,000 x 0.040109 (Rate in the Dollar)
= a base rates bill of 1,604.36

*This figure does not include rates income from recently constructed and valued properties, interest and other charges. This additional income brings Council’s total rates revenue to $101,964,000.

Fire Services Levy

Your rates notice also includes a separate Fire Services Levy, which Council is obliged to collect on behalf of the State Government.

Rate capping

The State Government has capped rate increases at 2.5% for 2016/17 and Council has elected to apply this 2.5% increase rather than seek an exemption from the cap.

It is important to remember that the 2.5% cap does not apply to your individual bill but rather to the total amount of money that Council is seeking from rates revenue.

Your rates are not calculated as a percentage increase over your previous rates notice, and as described below, revaluation of your home also has a direct impact on your final bill.

Most properties will experience rate increases that are higher or lower than 2.5%.

The MAV has produced this short video explaining rate-capping in simple terms.

How revaluation affects your rates

As required by the State Government, Council revalued all Yarra properties in 2016. We found that properties had increased in value by an average of 16.93% since 2014.

If your property’s value grew by more than 16.93% this will have resulted in a higher than average increase in your rates bill.

If your property’s value grew by less than 16.93% (or decreased) this will have resulted in a lower than average increase (or even a decrease) in your rates bill.

For example:

Old Value = $750,000
New Value = $1,000,000
Value Increase = 33.3% 
Old Rate Amount $1,733.25 
New Rate Amount $2,005.45
Rates have increased by 15.7%

Old Value = $950,000
New Value = $1,000,000
Value Increase = 5.3%
Old Rate Amount $2,195.45
New Rate amount $2,005.45
Rates have decreased by 8.7%

Revaluation of your property does not increase the total amount of rate revenue collected by Council. Rather it determines the proportion of rates you need to pay relative to other property owners.

Additional information on property valuation is available here.

Further Information
Rates Department
9205 5406

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