The capital improved value is used as the basis of rating for the new financial year, which commenced on 1 July 2016 A revaluation of properties does not mean extra rate revenue for Council. As part of its budget process, Council determines the amount of total revenue it requires to raise from rates. Property valuations are used as the basis for levying rates and therefore each property’s contribution to Council’s overall rate revenue is determined by its valuation. Rises in CPI, council spending on infrastructure and the cost of delivering services to residents are all factors considered when determining how much rate revenue needs to be collected. The Victorian State Government has also introduced a rate capping process which sets the maximum annual increase in rates. Council’s who wish to raise rates higher than “the cap” must follow a formal approval process.
Rates are redistributed according to shifts in property values that have occurred in different parts of the municipality. Some ratepayers may experience a change in their rates, depending on the type of property they own and where it is located. Changes in property values will vary across the municipality, and these will be reflected in each property’s rate bill.