Fact Sheet 18 - Council Rates and Charges

Under the Local Government Act 1989, local councils are able to levy rates and charges on most privately-owned land to raise revenue for funding the diverse and wide range of services they provide to the community.

Who must pay rates?

Most privately-owned land is rateable. The landowner is normally the person who must pay the rates or charges. In some circumstances, non-owner occupants can be required to pay a rate or charge.

What can happen if rates are not paid?

Councils may charge interest on rates and charges that have not been paid by the due date. Councils are also able to recover unpaid rates and charges in the Magistrates’ Court or by suing for debt. In certain circumstances, councils can sell land when rates or charges remain unpaid for more than three years.
If you are experiencing financial hardship, or if you are entitled to a concession, you may be able to apply to the council in writing for a deferral or waiver of your rates or charges. While councils have some discretion over whether they approve such applications, the Victorian Ombudsman can look at whether councils have used this discretion reasonably.

Complaints and the role of the Victorian Ombudsman

Generally, the Victorian Ombudsman will only become involved in complaints after you have made a written complaint to the council’s Chief Executive Officer and have received a response.

What type of complaint will the Ombudsman’s office consider?

Once you have received a response from the council, the Victorian Ombudsman may look at your complaint if there is:
  • no established legislative procedure for resolving it
  • no legal avenue of review or appeal to a court or tribunal.
The Ombudsman will consider if the council has followed relevant policies, procedures and legislation, and whether it has made reasonable decisions.

Examples where the Victorian Ombudsman may be able to consider your complaint include where the council has failed to:
  • send you a notice 14 days before the date on which the first payment of rates or charges is due, as required under the Local Government Act
  • notify you of a valuation, as required under the Valuation of Land Act 1960
  • register your change of address where you have evidence that you advised the council in writing of this change.

Complaints the Ombudsman may not get involved with

The Ombudsman generally does not get involved where there is an established process for you to make a complaint, or where the role of a court or tribunal limits the involvement of the Ombudsman. Below are some examples of areas where the Ombudsman does not normally get involved and what you can do to address your concerns:
  1. You are dissatisfied with council’s decision to change the property valuation method

Councils conduct regular property valuations to determine the rates that you need to pay. They can use three different methods to value your property: site value, net annual value or capital improved value. The Notice of Valuation for your property must show each of these three values and may show the valuation that will be used to calculate your rates. This value is then multiplied by the ‘rate in the dollar’ as determined by the council, to calculate the amount you have to pay.
For example, if the council uses the capital improved value (CIV), the CIV of your property is $500,000, and the rate in the dollar has been calculated by the council to be 0.002, the rates you need to pay will be calculated as follows:
$500,000 [CIV, the property value] × 0.002 [rate in the $]= $1,000 [total annual amount payable]

If a council decides to change the system that it uses for valuing land – for example, if it changes from net annual value to site value – it must give public notice of this change in a newspaper and on its website. If you do not agree with this decision you may:
  • make a submission to council to formally object. You must do this before the due date in the public notice.
  • request a meeting with the council to discuss your submission.
Once the council has considered all submissions made, it will write to you and inform you of its final decision and the reasons for that decision.
  1. You are not happy with the council’s valuation of your land

If you want to object to the property value placed on your land, the following objection process applies:
  • You must lodge your objection within two months to the authority that issued your Notice of Valuation.
  • Objections must follow a specific format and can only be made on certain grounds – for example, that the value assigned to your property is too high or too low. Valuation objection forms list the available grounds and can be obtained from council websites or the Department of Environment and Primary Industry website.
  • The valuer must provide you a reasonable opportunity to discuss the objection. The valuer must decide within four months whether to recommend an adjustment to the Valuer-General.
  • If the valuer recommends that the valuation be adjusted, the Valuer-General must decide within two months whether to confirm this.
  • If you are dissatisfied with the decision of the valuer or the Valuer-General, you may apply to the Victorian Civil and Administrative Tribunal (VCAT) within 30 days of the date the decision was given to you.
  • In certain circumstances, you may appeal to the Supreme Court.
  1. You wish to complain about a special rate or special charge

If a council intends to declare a special rate or special charge it must:
  • give at least 28 days’ public notice before making the declaration
  • send a copy of the public notice to each person who would have to pay the special rate or charge.
Any person who would have to pay the special rate or charge can make a submission or object, and seek a meeting about their submission. The council should respond to you in writing. If the council receives objections from a majority of the rateable properties that would be affected by the special rate or charge, the council cannot proceed with the special rate or charge.
You can also apply to VCAT for a review of a special rate or charge. You need to do this within 30 days after the notice of the special rate or charge was issued to you. You can only apply on certain grounds - for example, that the proposed works to be funded by the special rate or charge would not provide a ‘special benefit’ to you.
  1. You wish to appeal rates and charges on certain grounds

You may appeal to the County Court if you wish to review any rate or charge. The appeal must be lodged within 60 days after you receive written notice of the rate or charge notice. An appeal can only be made on the following three grounds:
  1. The land in question was not rateable land.
  2. The rate or charge was calculated incorrectly.
  3. The person levied with the rate or charge was not liable to be rated.
  4. You wish to complain about differential rates
Differential rating is when councils apply different rates to different kinds of land. Not all councils use differential rates. However, any council that does use this system should use its website to state the objectives of differential rating, define the types of land that are rated differently, and list the rates for each type of land. Councils that use CIV for rating purposes must also follow Ministerial guidelines for differential rating that are published in the Victorian Government Gazette.
You can apply to VCAT to review a council’s decision under a differential rating scheme to classify land that you own or occupy as being of a particular type. You must apply within 60 days of receiving the rates notice for that land. Further appeal to the Supreme Court may be available under certain circumstances.

The Fire Services Property Levy

Since 1 July 2013, council rates notices have included an amount for the Fire Services Property Levy (the FSPL). The FSPL contributes to funding the state’s metropolitan and country fire services. Previously, this funding was raised through a levy on premiums paid by people with home and contents insurance policies. The FSPL replaces that system and the levy is now imposed on land holdings regardless of whether the land owners have insurance. Properties that do not normally pay rates may still have to pay the FSPL – these properties are issued with a special notice.
The FSPL includes:
  • a fixed charge based on the type of land you own; plus
  • a variable amount that is calculated like a general rate. The ‘rate in the dollar’ for the FSPL is announced in the Victorian Government Gazette each year. The variable cost is calculated depending on the type of property you own, its capital improved value (CIV) and which fire service covers your area.
For more information about the FSPL you can visit www.firelevy.vic.gov.au.

Complaints about the Fire Services Property Levy

If you have a complaint about an insurance company continuing to charge you under the old insurance-based system, you can contact the Fire Services Levy Monitor (the Monitor). The Monitor has been set up specially to deal with complaints and to protect consumers during the transition to the FSPL. The Monitor’s website is at www.firelevymonitor.vic.gov.au.
If you think that the council has incorrectly calculated your share of the FSPL, or has otherwise failed to administer it correctly, the Victorian Ombudsman may be able to look at your complaint.

Contacting the Victorian Ombudsman

If you would like to discuss whether the Victorian Ombudsman can consider your complaint about rates and charges, you may contact the office using the details provided in this fact sheet.

Please note: This document is intended as a guide only. For this reason the information contained herein should not be relied on as legal advice or regarded as a substitute for legal advice in individual cases. To the maximum extent permitted by the law, The Victorian Ombudsman is not liable to you for any loss or damage suffered as a result of reliance on this document. For the most up-to-date versions of cited Acts, please refer to www.legislation.vic.gov.au.

© Copyright State of Victoria 2016                                                                         Issue Date Sep 2016   
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Contact Details

Victorian Ombudsman
Level 2
570 Bourke Street
Melbourne VIC 3000
Phone                     03 9613 6222
Toll free                  1800 806 314
Fax                         03 9602 4761
TTY                        133 677 or
                               1800 555 677
Interpreter service  131 450