Revaluation Fact Sheet 2014
How valuations affect your rates
A revaluation of properties in a municipality does not mean there will be a rise in
the total amount of rate revenue collected by a council.
Inflation, spending on infrastructure and the cost of delivering services to residents
are factors councils must consider when determining how much rate revenue is
collected.
Rate revenue is required by council to fund its budgeted expenditure for the year.
Valuations are used as an apportioning tool to assess the rates payable for each
individual property.
In addition to rates, the valuation is also used to determine the Fire Services
Property Levy (FSPL). The levy amount is shown on your rates notice. Council
collects the FSPL on behalf of the State Government.
Valuation bases
Valuers are required to assess three bases of value:

Site Value (SV) – the market value of the land only

Capital Improved Value (CIV) – the total market value of the land plus buildings and other improvements

Net Annual Value (NAV) – the current value of a property’s net annual rent (gross annual rental minus all
outgoings such as land tax, building insurance and maintenance costs but excluding council rates). By law,
NAV must be at least five per cent of the CIV.
How rate in the dollar is calculated
For a council using only a general rate, rate in the dollar is calculated as follows.
If council has estimated that the total rate revenue needed to cover budget expenditure is $10,000,000, and the
total CIV of all properties within the municipality is $2,380,950,000, then the rate in the dollar is simply calculated
by dividing $10,000,000 by $2,380,950,000 = 0.0042 which represents 0.42 of a cent in every dollar.
For councils using differential rates, the method used is similar, using certain rate revenue targets against selected
CIV property groupings. For example, total farm rate revenue of $2,000,000 divided by total value of farms, say
$1,000,000,000 = 0.0020 or 0.2 of a cent in every dollar.
How are general rates calculated?
The formula for calculating general rates (excluding any additional charges or arrears) is the valuation multiplied
by rate in the dollar set by the council. Councils determine the rate in the dollar as part of their budget process.
Your rate notice will provide specific details on how your rates are calculated.
For example, if the CIV of a property is $450,000 and the council rate in the dollar is set at 0.0042, the rate bill
would be $1890 ($450,000 x 0.0042).
How is the FSPL calculated?
The FSPL is a variable levy rate based on the property’s category and whether or not the property is located in a
Country Fire Authority or Metropolitan Fire Brigade area. Details of the FSPL are available at
www.firelevy.vic.gov.au.
How does a revaluation affect rates?
Stronger property values in a municipality will not always mean rate increases for property owners. Councils do not
collect more rate revenue just because property values have risen. Rates will simply be redistributed according to
shifts in property values that have occurred in different parts of the municipality. Rising property values usually
result in councils applying a lower rate in the dollar.
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 a municipality. These will be reflected in each property’s rate
bill. Information about a property’s value is included on the valuation and rate notice issued by the council.
Authorised by the Victorian Government, 2014
Land Victoria
Department of Transport, Planning and Local Infrastructure
570 Bourke Street, Melbourne
Telephone (03) 8636 2515
© Copyright State of Victoria,
Department of Transport, Planning and Local Infrastructure 2014
Except for any logos, emblems, trademarks, artwork and photography this document is made available under the
terms of the Creative Commons Attribution 3.0 Australia license.
This document is also available in an accessible format at dtpli.vic.gov.au
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