It lists legal representation and charges for waste management as factors for the rise
Garff Commissioners is increasing its rate by 14 percent to be able to maintain a 'robust fiscal position'.
It will be set at 191.5 pence in the pound and the local authority says the decision was made after 'careful discussion'.
The cost of legal representation, lower commercial rate income and an increase in waste management charges are some of the factors that led to the increase.
The commissioners say it has lower rates than some of the other 'middle sized' local authorities.
A spokesperson for the authority said: "Garff has the fifth largest population (being larger than Castletown, Port Erin, and Port St Mary in terms of number of residents).
"Garff’s demographic means that its income stream is not boosted by the level of commercial rate income which mitigates the financial situation of many other local authorities.
"The authority has the largest physical area to maintain, leading to significant maintenance costs for services such as road-side hedge-cutting, gully cleaning, and upkeep of extensive public areas between Ballure in the north and Groudle in the south.
"The authority's expenditure has been affected by external factors such as a 58 percent rise in external audit charges, substantially increased contributions to fund the operation of the Northern Swimming Pool facility, and several other above-inflation charges which have impacted on finances.
"In addition, the charging structure at the Northern CA site is under review and the board has felt it prudent to factor in contingency should further rises be imposed.
"Although Garff operates with a very low staff to resident ratio, increases in staff participation in the pension scheme and a review of operational staff remuneration has led to further above-inflation human resource expenses.
"The commissioners have been required to obtain legal representation to clarify the status of public facilities; this and the recent boundary review submitted to the government by Ramsey Commissioners have caused additional impact on financial resources.
"Investments at the campsite are ongoing and the final phase of modernisation will take place in 2024. The campsite is becoming a very popular facility and continues to attract an increasing amount of visitors to Laxey and Garff. In addition, investments in facilities such as electrical hook-up units will provide additional income for many years into the future.
"The district’s ageing streetlighting stock requires additional investment this year to maintain the units and an additional amount of £4,000 has been included in the budget to permit essential maintenance works to take place. When replacements are made more efficient LED lighting units are being installed which will reduce electricity supply charges going forwards.
"The number of domestic rates debtors has increased significantly during Covid as Treasury sought to provide assistance to those in financial difficulty. The board are now taking additional steps to assist Treasury in their efforts to recover debts from those householders in arrears."