The annual local council rate cap limits the maximum amount a council can increase general rates and municipal charges.
Annual council rate caps
Before 31 December each year, the Minister for Local Government sets the local council rate cap for the next financial year. The rate cap limits the maximum amount a council can increase general rates and municipal charges. The minister can set a cap that applies to all councils, a group of councils or a single council.
If the rate cap does not meet a council’s needs, the council can submit a higher cap application for up to four years of higher caps at a time.
We administer council rate caps by:
- providing the minister with advice on setting the rate cap for council rates
- assessing, then accepting or rejecting higher cap applications.
The 2025-26 rate cap is 3.00 per cent
For the 2025-26 financial year, council rate rises are capped at 3.00 per cent.
Approved higher rate caps
Hepburn Shire Council has an approved higher cap of 10 per cent for 2025-26 and Indigo Shire Council has an approved higher cap of 7.54 per cent for 2025-26.
Councils had until 31 March 2025 to apply for a higher cap in 2025-26.
Previous rate caps
Since the introduction of rate capping in 2015, the rate caps have been:
| Financial year | Rate cap |
|---|---|
| 2025-26 | 3.00% |
| 2024-25 | 2.75% |
| 2023-24 | 3.50% |
| 2022-23 | 1.75% |
| 2021-22 | 1.50% |
| 2020-21 | 2.00% |
| 2019-20 | 2.50% |
| 2018-19 | 2.25% |
| 2017-18 | 2.00% |
| 2016-17 | 2.50% |
Related work
We provide the minister with advice on the average rate cap for each financial year.
We assess, then accept or reject higher rate caps proposed by councils.
Access resources to help councils comply with rate caps, and view our reporting on compliance.