How rates are calculated

We determine the total amount of money required from rates in order to provide the services and infrastructure that the Yarra community needs.

A step by step guide to how rates are calculated

For example if our revenue was $100,000,000* we would calculate rates following the steps below:

Step 1: We divided this amount by the total combined value of all rateable properties in Yarra to find the rate in the dollar. For 2022/2023 the rate in the dollar figure is 0.03568099.

Step 2: The current Capital Improved Value** of each residential property is multiplied by 5% in accordance with state legislation. This produced the Net Annual Value of each residential property. (Commercial and industrial properties are rated similarly but include an additional component.)

Step 3: We multiplied the Net Annual Value of your property by the rate in the dollar to produce the amount you are required to pay in rates.

See our worked example for property A:

  • Capital Improved Value = $800,000
  • $800,000 x 5% = $40,000 (Net Annual Value)
  • $40,000 x 0.03568099 (Rate in the Dollar) = a base rates bill of $1,427.24

*This figure would not include rates income from recently constructed and valued properties, interest and other charges.

**Capital Improved Value (CIV) is the total market value of the land plus buildings and any other improvements.

Fire Services Property Levy

Your rates notice includes a separate Fire Services Property Levy, which we are obliged to collect on behalf of the State Government to fund the Metropolitan Fire Brigade and the Country Fire Authority (CFA).

Although this levy appears on rates notices, it is not a council charge for council services. It replaces the existing fire services levy charged by insurance companies in your home insurance premiums.

The Fire Services Property Levy comprises a fixed component of $117 for residential properties and $238 for non-residential properties, plus a variable component based on a percentage of the capital improved value (CIV) of the property.

The State Government also includes a variable component when calculating the Fire Services Property Levy. For more information and how to calculate your levy, visit the State Revenue Office Victoria website.

A concession will be available to some Department of Veterans Affairs gold card holders and Pensioner Concession Card holders.

What is rate capping?

The State Government has capped rate increases at 1.75% for 2022/2023 and we have elected to apply this 1.75% increase rather than seek an exemption from the cap.

It is important to remember that the 1.75% cap does not apply to your individual bill but rather to the total amount of money that we are seeking from rates revenue. Most properties will experience rate increases that are slightly higher or lower than 1.75%.

The MAV has produced this short video explaining rate-capping in simple terms.