Councils seeking a higher cap need to apply for a higher cap by 31 March each year.

The application needs to set out:

• the proposed higher cap for each specified financial year
• the reasons why the council is seeking the higher cap
• how the views of ratepayers and the community have been considered in proposing the higher cap
• how the higher cap is an efficient use of council resources and represents value for money
• whether other funding options have been considered and why those options are not adequate
• that the assumptions and proposals in the application are consistent with the council’s long term strategy and financial management policies.

Key dates in the higher cap applications process

We follow a consistent timeline for each higher cap application cycle. Dates listed here are approximate.

* Councils are not required to complete this step. But notifying us helps us give councils early advice and support.

How to apply for a higher cap

Guidance is provided to assist councils when applying for a higher cap. The Fair Go Rates system - Appling for a higher cap sets out the process to follow when a council is applying for a higher cap. A higher cap application must include the following:

• an application cover sheet which includes a statement addressing the six legislative matters
• a budget baseline information spreadsheet
• any necessary supporting documentation.

When the documents are completed and signed off by the CEO, email the application to localgovernment@esc.vic.gov.au.

The Minister for Local Government sets local council rate caps. The cap is the maximum amount a council can increase its general rates and municipal charges within a financial year. 

Each year, we produce a compliance report that outlines whether councils have complied with their council rate cap when they set their rates for each financial year.

The change in your council rates may not be the same as the rate cap

A council can comply with the rate cap even if individual ratepayers experience rate increases higher than the rate cap. View more information for ratepayers on this topic. 

Every two years, we are required to report on the outcomes of rate capping in Victoria. We identify any impacts or trends that might be emerging across the local government sector.

You can use this page to download information related to your council and view our over-arching report. 

This is our first outcomes report

We have completed the first of these reports since the introduction of rate capping in the 2016-17 financial year.

The outcomes report aims to provide information about councils’ service, infrastructure and financial outcomes following the introduction of rate capping. This first report looks at the outcomes in these areas in the years 2016–17 and 2017–18.

The report includes an overview paper accompanied by fact sheets on the impact of rate capping for each of the five council groups and for each local government area.

View your local council's fact sheet

Find information about your local council's revenue, expenditure and finances before and after the introduction of rate capping: 

1. Use the tabs at the top of this page to find your local council.
2. Download your council's fact sheet and the related council group fact sheet. You can use the group fact sheet to compare your council to a group of similar councils. 
3. View our reader's guide to council fact sheets, which aims to help you understand how we've presented data in our local council and council group fact sheets.

What happens next

We will continue to monitor the outcomes of rate capping and expect to release our second report in 2021, which will include results from 2018–19 and 2019–20. This will enable you to start to see your local council's trends over time in key outcome areas.

We're also going to work with all Victorian local councils in preparation for the next outcomes report in 2020-21. We will be reviewing our processes and the measures included in the report to see how we may improve our second report in two years’ time. This will include seeking feedback from councils and ratepayers as part of our ongoing engagement with the sector.

Other useful resources

If you'd like more information on rates, you can view:

• your council’s annual report, budget and website
• the Local Government Victoria's website 
• the Victorian Auditor-General’s Office's interactive dashboard of council financial results
• the Victorian Government’s Know Your Council website, which gives you consistent information about the performance of local councils across Victoria.

Got a question?

Contact us for more information.

We have received and assessed one application for a higher cap for 2018-19. Monash City Council applied for a one year higher cap of 3.53 per cent.

We have approved an alternative higher cap of 2.57 per cent, which is 0.32 per cent above the minister’s cap. 

Our Monash City Council Decision on Application for a Higher Cap 2018-19 paper outlines our assessment approach and explains how we reached our decision.

We have also published the Monash City Council higher cap application for 2018-19, and other resources. 

In January 2015, the Minister for Finance asked us to conduct a review and report on a local government rates capping and variation framework for implementation from the 2016-17 financial year. Our final report outlines a rate capping and variation framework.

The government released a response to our report.

Each year, the Minister for Local Government sets the rate cap that specifies the maximum councils’ can increase rates for the forthcoming financial year. The minister can set a cap that applies to all councils, a group of councils or a single council.

Our advice to the minister includes:

• a recommendation for any adjustments to be applied to consumer price index in setting the cap for all councils, a grouping of councils or any individual council
• the rationale for any adjustment
• a preferred option if we recommend more than one option.

Councils can choose to submit a higher cap application to us if the rate cap does not meet their needs. 

We released decisions on higher cap applications for the 2016-17 financial year.

We asked Mr Peter Brown (former CEO of Moreland City Council) to undertake an independent review of our process and approach for assessing higher cap applications for 2016-17 year (as outlined in the review's terms of reference).

The findings from the review embody the independent judgements of its author and will help us plan and prepare for future higher cap applications from councils. Mr Brown completed his review and submitted the independent report on higher cap applications on 28 September 2016.

We released a response to the independent report.