As reported by the Weekly, hundreds of rural landholders are paying thousands of dollars more in rates this financial year.

As part of its budget approved on June 30, the council introduced a higher rate category for "development land".

A total of 430 properties of more than two hectares were hit by an average rate rise of up to 175 per cent.

The council said the hike was to recover expenses related to urban growth area planning.

After lodging objections during last year's budget planning process, the landowners' group met with council representatives in August but were unable to reach an agreement.

The group has since appealed to the Victorian Civil and Administrative Tribunal in an effort to have the rates increase repealed.

A decision on whether the VCAT has jurisdiction in the matter - a proposition the council is understood to have challenged- will be handed down in March.

Members have also erected signs around the shire, protesting against the rises, while some residents wore shirts with the slogan 'Don't rate us off our land and homes' at last week's Australia Day celebrations.

Landowner Ellen (not her real name) said many landholders believed the council had shown a lack of empathy to its rural residents.

She said the increases were premature and should not be applied until properties inside the growth boundary were sold.

"We're not millionaires. I've contacted 16 developers and noone is interested in my land. We bought here because this is where we want to live."

Through tears, she said her health had deteriorated since the increases were announced.

"It is first thing you think of in the morning ... I would hate to think what it would be like as a pensioner in their twilight years."

Ratepayers Victoria president Jack Davis said the council should listen to the more than 200 people who attended a budget submission hearing in June.

"This is discrimination. Why must 430 property owners pay for the cost of urban planning that will benefit future landowners?

"We agree that landowners should not be excessively rated because their land fell within the urban growth boundary ...we understand that some will reap the benefits of the new zoning regulations, but what allowances have been made for those that do not intend to develop their land?"

The council did not respond before the Weekly's deadline.