The town rates in Castletown will be reduced by 50p in the pound.
The lower rate of 291p in the pound will be offset by introducing a fixed refuse charge for domestic properties at £135 - meaning the average household will pay an extra £75.20 per year.
Chairman of Castletown Commissioners, Colin Leather, says he and the board feel the current rating system is not fit for purpose.
He added the new measures have been deemed the fairest way to fund a service residents get equal benefit from.
The changes will come into effect from April 1.
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