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Rates and Taxes

A general valuation includes all rateable land in a municipality. For each separate occupancy of rateable land, three valuations are to be assessed:

  • Net Annual Value (NAV) 
  • Capital Improved Value (CIV) 
  • Site Value (SV) 

In the 2006/2007 rating year, 74 councils used CIV, 5 NAV and 1 SV in Victoria. SV is used by the Victorian government to assess land tax.

Rates

All Municipal councils require rate revenue to finance their annual budgeted expenditure. The primary purpose of council valuation is to provide a basis for determining the property owner’s contribution to the council’s consolidated revenue. The valuation is determined every two years on the 1st of January by qualified valuers’ engaged or employed by your council.

The formula for calculating general rates is the Valuation (i.e. CIV, NAV or SV) multipled by the Rate in the Dollar set by the council. Your Melbourne property rate notice will provide specific details on how your rates are calculated.

Higher 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 areas of the municipality.

It is important to know that the value ascribed to your home by the council is not always the same as what you would or may receive if you were to sell your home tomorrow.

Land Tax

Land Tax is an annual tax based on the value of any buildings or other improvements. The annual assessment is calculated on your total taxable land holdings at midnight on 31 December of the previous year.

The State Revenue Office (SRO) issues assessments between February and May each year. You may be liable for land tax if the value of your land holdings is $250,000 or more. Your land holdings may include:

 •  one or more investment, commercial or industral properties
   a holiday house
   primary production land (PPL), or
   vacant land, including vacant rural land.

Exempt land such as land used for primary production or a person's principal place of residence (PPOR) is not included in the calculation. If you own land with a total taxable value of $250,000 (or $25,000 for trusts subject to surcharge) or more (excluding exempt land) you must pay land tax. See Land Tax Tables...

The taxable value of land for land tax purposes is the Municipal council site value provided by your local council. Municipal councils conduct general valuations every two years.