How council rates are actually calculated
Almost nobody reads a rates notice and understands how the number was reached. It is not a fee for services and it is not a percentage of what your house is worth. It is a share of a total, worked out from the value of your land, and the two eastern states arrive at it in genuinely different ways.
Council rates are calculated by multiplying the unimproved value of your land by a rate in the dollar set by the council, subject to a minimum charge. The unimproved value is the land only, ignoring the house on it. In New South Wales the total a council may collect is capped by the IPART rate peg. In Queensland there is no cap, and councils instead set a minimum general rate that many properties pay.
Key statistics
- Based on
- Unimproved land value
- Not based on
- House value or sale price
- NSW control
- IPART rate peg on total income
- QLD control
- Council-set minimum general rate
- NSW median
- $1,282
- QLD median
- $1,369
Methodology
Queensland council figures are the minimum residential general rate for an owner-occupied principal place of residence, a floor rather than a typical bill. New South Wales council figures are the average residential rate reported to the Office of Local Government, uplifted by each council's IPART rate peg. It is a typical bill, not a floor. The two states publish different statistics and are never averaged or ranked together on this site. Figures come from each council's adopted budget or revenue statement for Queensland, and from the Office of Local Government dataset uplifted by the published IPART peg for New South Wales. Waste charges, levies and separate charges are excluded throughout.
The formula
Every council in Australia works from the same basic calculation.
Unimproved land value × rate in the dollar = your general rate, unless that comes to less than the council's minimum, in which case you pay the minimum.
The rate in the dollar is a small decimal. A council might set 0.00354, which is 0.354 cents for every dollar of land value. On land valued at $500,000 that produces $1,770.
The valuation is not your property's market value. It is what the land alone would be worth with nothing built on it, assessed by the Valuer-General rather than the council. Two identical houses on identical blocks pay the same rates whether one is renovated and the other is derelict.
Why the minimum matters more than the formula
For a large share of ordinary houses, the formula never comes into it. If land value multiplied by the rate in the dollar falls below the council's minimum, you pay the minimum, and that is a flat figure identical for every property in the category.
This is why the figures we publish for Queensland are minimums. Below a certain land value, everyone in a council area pays exactly the same amount, and that amount is the most useful single number for comparing councils.
How NSW and QLD differ
| New South Wales | Queensland | |
|---|---|---|
| Cap on increases | IPART rate peg, on total council income | None. Each council sets its own |
| Figure we publish | Average residential rate | Minimum general rate |
| Valuation basis | Unimproved land value | Unimproved or site value |
| Above-cap increases | Special variation, approved by IPART | Not applicable |
| Median 2026-27 | $1,282 | $1,369 |
The difference in what gets published is the reason a New South Wales figure and a Queensland figure should never be added together or ranked in one list. One is an average across a council, the other is a floor that a particular kind of property pays. They describe different things and we keep them apart everywhere on this site.
Why your neighbour pays a different amount
Three reasons cover almost every case.
Their land is valued differently. A corner block, a larger block or a better aspect can move the valuation without either house looking different from the street.
They are in a different rating category. Councils set separate rates for residential, rural residential, commercial and often for land that is not the owner's principal place of residence. An investment property next door to an owner-occupied one frequently pays a different rate on the same valuation.
They are across a boundary. Council borders run down the middle of streets in places, and two houses facing each other can sit in different local government areas with different rates entirely.
What is not in the general rate
The general rate is only part of a notice. Domestic waste management is charged separately and is usually a flat annual amount. Depending on the council you may also see a stormwater levy, an emergency services levy, and in Queensland a separate charge for water and sewerage where the council is also the water provider.
Every figure published on this site is the general rate only, excluding waste and levies, because that is the part that is comparable between councils.
Rates are one of four numbers
If you are looking up rates because you are choosing where to live, it is worth knowing that rates are usually the least variable of the costs that differ by suburb. Water, insurance and the commute all move further.
Our suburb pages total all four for about 6,000 suburbs in New South Wales and Queensland, and the comparison pages put two side by side. If you want the figures rather than the method, see every NSW council ranked or the Queensland councils, and why rates rose this year for what changed in 2026-27.
Once you know how the rate is struck, the more useful question is what it adds up to. Estimate the annual cost for a specific suburb including water, commute and insurance.
Frequently asked questions
How are council rates calculated?
Unimproved land value multiplied by a rate in the dollar set by the council, subject to a minimum charge. If the calculation comes to less than the minimum, you pay the minimum.
Are council rates based on the value of my house?
No. They are based on the unimproved value of the land, which ignores any building on it. Two identical blocks pay the same rates whether one holds a new house and the other holds a shed.
What is unimproved land value?
What the land alone would be worth if nothing had been built on it. It is assessed by the state Valuer-General rather than by the council, and it is the base figure councils apply their rate in the dollar to.
What is a minimum general rate?
A floor. Where land value multiplied by the rate in the dollar produces less than the minimum, the property pays the minimum instead. In Queensland a large share of ordinary houses pay exactly this figure, which is why it is the most useful number for comparing councils.
Why are NSW and QLD rates not comparable?
Because the published figures measure different things. The NSW figure is an average residential rate across a council, uplifted by the IPART peg. The Queensland figure is the minimum general rate a property pays. Adding them together or ranking them in one list would be meaningless.
Does my rates notice include water and rubbish?
Usually rubbish, yes, as a separate domestic waste charge. Water varies: in parts of Queensland the council is also the water provider and bills separately, while in Sydney water comes from Sydney Water and not from the council at all.
Cite this data
SuburbCost data is free to cite with attribution. Please link to this page as the source.