Property price rise but no rate windfall for Warrnambool and Moyne Shire councils

Most ratepayers can expect their bills to be 1.5 per cent higher than last year when notices arrive in letterboxes this month. Only about a quarter of ratepayers should see their bills increase much more than that.

Unlike other taxes like the state government's stamp duty, there is a statewide 1.5 per cent cap on how much total council revenues can rise from rates and charges compared with last year.

In Warrnambool, general rates will collect $30.8 million worth of public funds this year, up from $29.9 million the year before - a rise of 3 per cent.

This rise is higher than 1.5 per cent because there are more properties paying rates thanks to the city's growth, not because ratepayers are individually coughing up more than the cap.

Warrnambool house prices increased 11 per cent according to the Valuer-General in January, and in Moyne Shire there was a 13 per cent rise.

But Warrnambool City Council corporate strategies director Peter Utri said house prices rising had no link to overall rates revenue.

"Council is often subject to criticism about a windfall that doesn't exist," Mr Utri said.

However, this doesn't mean some property owners' rates won't go up due to valuations.

Mr Utri said each year about 25 per cent of properties had rate rises of more than 1.5 per cent because of higher-than-average value increases.

But the majority of rates rise by about 1.5 per cent while payments fall for about 25 per cent of properties because the value changed below average. This could mean a property value increases but the rates still fall.

The average rate bill in Warrnambool last year was $2,052.50, including fees and charges - this year it will be $2,084.52.

Mr Utri said there was no area of the city where rates were rising more than others. "The trends have been across the property market," he said.

Moyne Shire Council corporate services director Kevin Leddin said the rise in house values was "great news for people's equity".

"The value of their priorities have gone up significantly," he said. "Most of the shire experienced pretty significant increases."

The council will receive $15.8 million in general rates, with growth in ratepayers again accounting for a 2.2 per cent rise in revenue compared to the year before.

Council rates uses a property-based system to charge for services that residents need, rather than a tax based on income.

Is this the best system? Mr Leddin said debate had "raged for decades".

"If you have two houses next door to each other ... who consumes more services from the council?" he said. "If you don't do that, what do you replace it with? I don't know the answer."

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