Valuation increases do not result in the City of Mitcham receiving additional rate revenue. We have a process for budgeting and setting of rates that specifically prevents this from occurring.
A common misunderstanding about rates and property valuations is that increases in valuations result in the City of Mitcham receiving what is commonly described in public discourse as “windfall” revenue, this is not the case.
Even though property valuations in the City of Mitcham increased by 11% on average in 2023, the City of Mitcham reduced the rate in the dollar accordingly so that the total rate revenue received in 2023 remained the same as the budgeted 8.9% increase needed to fund existing services and new services.
The above holds true at the total budget level, however as valuation movements are never uniform across the Council area this is where the misunderstanding can occur. Because of the variation in valuation movements there are properties that will pay more than the budgeted 8.9% increase and for every one of those there is a property will pay less than the budgeted 8.9% increase (even though that property may have also increased in valuation). Some properties may even experience a rate reduction as a result.
The formula works like this:
The rate in the dollar is then applied to all individual valuations to determine the relative share of the total rates each property pays.