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About rate capping

The Victorian Government has introduced a new rate cap system that restricts how much councils can collect in rates. The Fair Go Rates system takes 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 caps the increase to Council’s total revenue from general rates and the municipal charge. Each year the Minister for Local Government will set the rate cap for the next financial year. A rate cap of 2.5 per cent for the 2016/2017 financial year was announced in December 2015.

How does rate capping work?

A council’s overall rate revenue must not be more than 2.5 per cent higher than last year. 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 2016/2017.

Will my rates go up by 2.5 per cent?

The rate cap does not apply to individual rates notices. The overall rate revenue collected by a council cannot exceed the 2.5 per cent rate cap, but how much each property owner pays is determined by the value of your property. The Victorian Government also excluded waste charges and the fire services property levy from the rate cap.

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 a fair share of rates. Properties with higher market value attract higher rates than properties of a lesser value. All properties were revalued on 1 January 2016January the 1st this year. Valuations are conducted by qualified, independent valuers.

Total council rates are capped at 2.5 per cent. Some ratepayers will pay less than the rate cap and others will pay more. The overall general rates collected by a council won't exceed the 2.5 per cent rate cap, unless they were granted an exemption by the Essential Services Commission.

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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