The rates cap and your rates

Under the Victorian Government’s rates system, the Minister for Local Government sets the average rate cap. The cap is the maximum percentage a council’s average rates can increase by each year.

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Local council outcomes report 2021

Under the Victorian Government’s rates system, the Minister for Local Government sets the average rate cap – the maximum percentage a council’s average rates can increase by, each year. A council may apply to the Essential Services Commission for a higher percentage if it believes this percentage is not enough for it to be able to deliver the services and projects it needs to for its community. As part of our financial strategy, Port Phillip Council seeks to manage its costs and revenues to stay within the rates cap.

The Minister for Local Government has capped rates at 1.5 per cent for 2021/22.

However, this does not mean your rates bill will increase by 1.5 per cent. What it does mean is that the total amount of revenue collected through rates will increase by 1.5 per cent. Your rates bill may increase or decrease depending on a number of factors, in particular the change in the value of your property.

For more information, visit Valuations.

Outcomes of rate capping 2021

The Essential Services Commission (ESC) publishes annual reports on the outcomes of rate capping in Victoria to identify any impacts or trends that might be emerging across the local government sector.

The outcomes report provides information about councils' service, infrastructure and financial outcomes following the introduction of rate capping.

Information is available on Port Phillip and its surrounding councils:

For full details and current information, including facts and figures for all Councils, visit Essential Services Commission.

How does rate capping work?

Rates valuations

Legislation now requires valuations to be conducted annually by the Valuer-General Victoria as the valuation authority at the statutory date (1 January). The revaluation impacts the rate amount billed to individual ratepayers, as rates are assessed on the value of the property.
The redistribution of rates is based on the market movement of property values from 1 January 2020 to 1 January 2021. This varies from property type and location within the municipality.
Valuation services are carried out by independent qualified valuers. Each stage of the valuation process is approved and certified by the Valuer-General Victoria.
The general valuation on 1 January 2021 has been completed and certified. These valuations will be used to calculate your rates for 2021/22.
Rates in the City of Port Phillip are based on the Net Annual Value (NAV) of a property. The effect of this differs depending on the type of property:
- Residential properties (dwellings and units): by law, the NAV must be five per cent of the Capital Improved Value (CIV) of the property - the total market value of the land, plus buildings and other improvements.
- Commercial and industrial properties: the NAV is calculated based on the current value of a property’s net annual rent (that is, gross annual rental less all outgoings such as Land Tax, building insurance and maintenance costs - but excluding Council rates), or five per cent of the CIV - whichever is greater.
For all properties, the market value of the land (Site Value - SV) is also assessed during the valuation process.

Contact us

For any questions, information requests or feedback, contact us:

Online: Online Services
Phone: 03 9209 6777 via ASSIST

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The rates cap and your rates

Outcomes of rate capping 2021

How does rate capping work?

Rates valuations

How do valuations affect my rates?

Who does the valuation?

Contact us

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