How the rate cap works
- Each year, the Minister for Local Government sets the average rate cap for the next financial year. It can apply to all councils, a group of councils or a single council.
- The cap is based on the consumer price index (CPI), with any adjustments up or down.
- It covers general rates and municipal charges only.
- If a council believes it needs more rates revenue to meet its financial needs, it can apply to us for a higher cap. We decide whether to approve it.
Why your bill may change by a different amount
The rate cap limits how much a council can increase its average rates in a year. It doesn’t limit the change to each property’s bill. For example, if the cap is 2.75 per cent, your bill could rise by more or less than 2.75 per cent, or fall.
Your change may be different because of:
- the value of your property compared with others in your council area
- charges that aren’t covered by the cap, such as the waste charge. The cap applies only to general rates and municipal charges
- your property type (residential, commercial or rural). Councils may share the amount of rates they collect differently across these types.
Local Government Victoria explains how individual property rates are calculated.
If you’re having trouble paying your rates
Contact your council. The contact details are on your rates notice. Most councils have a financial hardship policy. Options may include deferring a payment or setting up a payment plan. Each council’s policy and application process is different.
Our role
We assess applications from councils for a higher cap. We also report each year on whether councils followed the rate cap.
Who to contact
| If you want to... | Go to |
|---|---|
| Ask about your rates notice, how your rates were calculated or hardship help | You council |
| Find out whether your council has applied for, or been approved for, a higher cap (or plans to apply) | Recent higher cap applications |
| Check whether your council followed the cap | Our annual compliance reports |
| Ask about the annual rate cap or our outcomes reports | Contact us |
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