How Council Rates Are Calculated in Victoria: CIV, Rate in the Dollar and Your Rates Notice Explained

The Basic Formula

Victorian council rates are calculated by multiplying your property's Capital Improved Value (CIV) by the council's rate in the dollar, then adding the flat municipal charge:

Gross Rates = (CIV × Rate in the Dollar) + Municipal Charge

Your CIV is the estimated market value of your property including the land, the building, and any improvements. It is set by the Valuer-General Victoria (VGV) through annual revaluations — not by your council. The rate in the dollar is set by your council during its annual budget process and varies between municipalities. The municipal charge is a flat administrative fee that every ratepayer in the council area pays.

For example, a property with a CIV of $600,000 in a council with a rate in the dollar of 0.0012 and a municipal charge of $100 pays: ($600,000 × 0.0012) + $100 = $720 + $100 = $820 in gross rates before any concessions.

What Differential Rates Mean

Many Victorian councils apply differential rates — different rates in the dollar for different categories of property. A council might charge residential properties 0.0012 per dollar of CIV, vacant land 0.0024, commercial properties 0.0018, and farm/rural land 0.0009. The category your property falls into is determined by its land-use classification.

Differential rating means two properties with the same CIV can pay very different rates depending on whether one is residential and the other commercial.

The 2.75% Rate Cap

The Victorian Government caps total council rate revenue growth through the Fair Go Rates System. For 2026/27, the cap is 2.75%. This limits how much a council's total rate revenue can grow year on year — but it does not cap your individual bill. If your property's CIV increased more than the average across the municipality, your individual rates can rise by more than 2.75% even though the council's total revenue stayed within the cap.

This is a common source of confusion. The rate cap is a revenue limit, not a bill limit.

Reading Your Rates Notice

A typical Victorian rates notice breaks down into several line items:

• General rates — your CIV × the rate in the dollar
• Municipal charge — the flat administrative fee
• Waste charge — sometimes bundled into general rates, sometimes listed separately
• ESVF levy — the Emergency Services and Volunteers Fund charge (fixed + variable component)
• Special rates — if applicable (street lighting, trader precincts)
• Concession credits — if you hold a Pensioner Concession Card, you should see "State Government Rates Concession" and "ESVF Pensioner Rebate" as deductions

If you are a concession recipient, the 50% rates concession applies to the general rates and municipal charge combined, up to the $272.70 cap. Waste charges (if separately itemised), special rates, and the ESVF levy are not included in that 50% calculation. The ESVF has its own $50 rebate.

If Your CIV Looks Wrong

If you believe your property's Capital Improved Value is too high — which directly inflates your rates — you have the right to lodge a formal objection with the Valuer-General Victoria within 60 days of your rates notice being issued. The objection process is free. See property valuation objection Victoria for the full process.

For a worked calculation using your own property's numbers and a line-by-line audit of what your concession should be, the Victoria concession guide includes the formulas, scenarios, and an audit worksheet.

See more Victoria guides →