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Rateable Values vs. Market Values

Summary

  • Rateable value (RV) is used by councils for rates and doesn’t always reflect your home’s true value.
  • Market value is the estimate of what your property would sell for today, based on current conditions.
  • RVs for new builds are set post-construction and may not capture all features.
  • Renovations may not be reflected in your RV until the next council review.
  • Understanding both values helps you make informed decisions around building, planning, and budgeting.

Understanding the difference between rateable values (RVs) and market values is important for anyone who owns a property—or plans to build or renovate one. While these terms are often used interchangeably, they serve very different purposes and can impact your finances, especially when it comes to property rates, planning, and long-term value.

At VillaWorx Construction, we’re committed to helping homeowners make informed decisions about their building projects. Whether you’re planning a renovation or building a new home, understanding how property values are calculated can help you plan better, avoid surprises, and stay aligned with council expectations.

What Is a Rateable Value?

A rateable value (RV)—also known as a capital value (CV) is an assessment carried out by your local council to calculate your property rates. It’s a legally required valuation, typically reviewed every three or so years.

Key facts about RVs:

  • Set by councils or contracted valuers.
  • Based on the likely sale price at the time of valuation (not today).
  • Includes the value of land and improvements (e.g. buildings).
  • Does not consider interior upgrades, property maintenance, or modernisation.
  • Used only for rating purposes, not as a market appraisal.

Tip: Even if you’ve extensively renovated your home or built new, your RV might not fully reflect those improvements until the next rating cycle.

What Is Market Value?

Market value is the estimated price a property would sell for in the current market, considering demand, location, recent sales, and property features.

Market value is determined by:

  • Current real estate trends
  • Comparable property sales
  • Quality and condition of the property
  • Location and school zones
  • Buyer interest and economic conditions

Unlike RVs, market values can shift quickly, especially in a fluctuating property market. While RVs offer a snapshot from the past, market values reflect what your homes estimated worth is today.

How Do RVs and Market Values Impact New Builds and Renovations?

For New Builds:

  • When you build a new home, the council assigns an initial RV once construction is complete.
  • This RV will be based on standard valuation models, often not reflecting custom design features, material quality, or energy efficiency.
  • The RV will affect your annual council rates, but it may not represent your home’s true market worth.

Example: A highly energy-efficient home with premium finishes may have the same RV as a basic build of the same size, despite costing more to construct and being worth more on the open market.

For Renovations:
  • Significant improvements (e.g. extensions or recladding) may trigger a council reassessment of your RV.
  • However, not all upgrades are captured immediately—especially interior-only renovations.
  • This means your RV might stay the same even after you’ve invested in value-adding improvements.

If your renovation includes structural changes, the council is more likely to reassess your RV during the next rating cycle or after you receive a Code Compliance Certificate (CCC).

How Rateable Values Affect Your Rates

  • Councils use RVs to determine your property rates, not your home’s market value.
  • If your RV increases more than the average in your area, your rates may go up, even if the council’s total budget hasn’t changed.
  • If your RV changes less than average, your rates may drop.

So while improving your home or building new can affect your rates, it doesn’t always mean you’ll pay more, it depends on how your RV compares to other properties in the region.

Why This Matters

Understanding the difference between rateable value and market value helps you:

  • Plan for council rates on new builds or after renovations.
  • Avoid relying on RVs as an indicator of property value.
  • Recognise when a property reassessment might occur.
  • Manage expectations around how improvements affect your official property value.

Thinking of Building or Renovating?

At Villaworx Construction, we deliver high-quality, future-proof homes tailored to your needs. If you are building new or are renovating, get in touch with us!

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