Calculation of Rates

Rating categories and values

We have a Revenue and Rating Plan that establishes the revenue raising framework within which we propose to calculate rates and charges.

The Plan sets out decisions that we have made in relation to rating options available to it under the Local Government Act 1989 to identify the fairest and most equitable method of distributing rates across the Alpine Shire. The rating structure includes a general rate, differential rates, and a special rate.

The Plan does not set revenue targets for us. Rather, it outlines the strategic framework that inform how we will go about calculation and collecting its revenue, including rate policies.

The Plan outlines the following categories and values:

Categories

There are three rating categories:

• General rate – the cornerstone of our rating structure, applied to every property unless the property falls into a specific differential rate category
• Farm rate – a lower rate set at 73% of the general rate and charged on properties that qualify under our Farm Rate Policy
• Commercial/industrial rate – a higher rate set at 143% of the general rate and charged on properties that fall under our Commercial/Industrial Rate Policy

Values

All properties in Victoria are now valued annually by Valuer-General Victoria.

The three values shown on your notice are:

1. Capital Improved Value (CIV)

Includes a) any improvements, like houses, sheds, swimming pools, fences, orchards, and pergolas, and b) the value of the land (shown on the rate notice as site value).

2. Site Value (SV)

The value of the land only. It is included in the Capital Improved Value (CIV). You do not add the two together.

3. Net Annual Value (NAV)

The amount in rent that could reasonably be received from the property over 12 months. It is not used for the calculation of rates.

Valuations impacting on rates

Each year your property is valued by the Valuer-General Victoria to determine the Capital Improved Value (CIV). This value is used to work out your rates and land tax. We are not involved in setting your property’s valuation.

The amount of rates you pay each year is influenced by changes in the value of your property and the type of property you own.

A range of information is used by the Valuer-General to calculate property values, including analysing nearby property sales and rents, and looking at the features of a property. Data about a property is collected from inspections, building and planning permits and other public sources.

A range of factors, including a lack of housing availability, increased demand from people relocating to rural areas and a shift to remote working has impacted property prices across the Alpine Shire specifically, and regional Victoria in general.

What value is used to calculate rates?

We calculate rates by multiplying the CIV by the applicable rate in the dollar that is set each year by us as part of the budget process. CIV includes the site value of your property. CIV and Site Value (SV) are not added together to calculate your rates.

We adopted a 2.75% rate increase in the 2024/25 Budget. Property owners who have experienced a large increase in the value of their property will likely see that the increase in their rates on the previous year is higher than 2.75%.

Property owners whose property has increased at a lower rate will likely see an increase in their rates of less than 2.75% or might even see a reduction in their rates compared to last year.

Application for Higher Rate Cap 

Council is currently considering applying to the Essential Services Commission (ESC) for a higher rate cap for the 2025/26 financial year. 

In December 2023, the Minister for Local Government made changes to the Minister's Good Practice Guidelines for Local Government Services Rates and Charges. Changes related to the composition of a service rate or charge.  

The Minister's guidelines specifically impacted Council by indicating that it was "not good practice" to include in the waste management charge costs associated with litter and waste collection from public spaces and the provision of public bins, as the amount levied on each assessment will be primarily determined by the value of the property, not the cost of the specific service rendered. (To note: there were further costs deemed "not good practice" under the new guidelines however they do not impact on Council). This change will impact on the 2025/26 Budget. 

The State Government caps rates increases under the Fair Go Rates System, which allows local governments to raise rates only in line with the cap set by the Minister. The cap for 2025/26 has been set at 3.0%. To provide context, 3.0% of our General Rate base equates to approximately $525k per annum. 

The amount of the waste management charge currently being raised to be expended directly on managing public place waste is approximately $350k per annum.  

The rate cap limits the maximum amount a council can increase general rates and municipal charges. If the rate cap does not meet a council’s needs, the council can submit a higher cap application to be allowed to set a higher rate for up to four years. Oversight of the rate cap, and applications for a higher rate, are managed by the Essential Services Commission (ESC). 

In order to follow the Ministerial guideline regarding the make up of the waste management charge, Council has assessed options on how to remove the recovery of this income from the waste management charge. Options available to Council include: 

• Absorb the costs against the rate revenue base and budget for managing public waste as an additional expenditure; 

• Review the delivery of public waste services with an aim to reduce costs;  

• Apply for a higher rate cap to allow the current recovery of funds to be moved from the current waste management charge to rate revenue in addition to the 3.0% rate cap increase allowed under the Fair Go Rates System. 

Moving the current recovery of costs associated with managing public place waste would be a cost neutral impact on ratepayers, and it is recommended that Council undertakes the processes required to apply for a higher rate cap from the ESC in order that remains an option to be considered, if approved by the ESC, through the engagement and approval processes associated with the 2025/26 Budget process.  

The processes to apply for a higher rate cap are involved and include notifying the ESC that Council intends on applying for a higher rate cap by 31 January (not mandatory but allows Council to receive guidance and assistance from the ESC on processes), and submitting the required documentation for a higher cap by 31 March. The application requires Council to set out:  

• The proposed higher cap for each specified financial year; 

• The reasons why the council is seeking the higher cap; 

• How the views of ratepayers and the community have been considered in proposing the higher cap; 

• How the higher cap is an efficient use of council resources and represents value for money; 

• Whether other funding options have been considered and why those options are not adequate; 

• That the assumptions and proposals in the application are consistent with the council’s long term strategy and financial management policies. 

Should Council not undertake these processes now, then we would be unable to apply for an exemption in time for this to be considered by Council for Budget adoption.  

Rate increases are approved by Council as part of the annual Budget process and Council remains able to determine the rating increase to be adopted (subject to the rate cap or ESC approvals) at that time. 

Fire Services Property Levy

The Fire Services Property Levy is included in your rate notice, which we collect on behalf of the Victorian Government.

Where multiple parcels of land are used to operate a Single Farm Enterprise (SFE), you may only be required to pay the fixed charge once, by applying for the SFE exemption.

To apply, fill out the form and return your completed form to us.

Find out more by visiting the State Revenue Office Fire Service Levy.