Flood is one of the major natural disasters in Australia. It breaks down transportation and communication systems, disrupts businesses and causes damage to properties, loss of stock, crops and also loss of human lives. Better understanding of the impacts resulting from floods and other natural hazards can help to reduce the damages or losses. Flood damage assessment procedures estimate the impact of flood in monetary terms to help decision makers develop new policies, programs and development plans. This study examines different techniques, procedures and underpinning philosophies that have been used in some major emergency management and insurance organizations in the world such as RAM, ANUFLOOD, and HAZUS and NHRC. From this examination the study finds that none of them are suitable for mitigation and emergency purposes in producing economic flood damage estimation at fine resolution with high accuracy. From this perspective the study develops a rigorous procedure for property level economic flood damage assessment. The assessment procedures are embedded within GIS (Geographic Information System) technology which can model and analyse the multidimensional phenomenon of flood and damage characteristics of residential buildings. The damage estimation procedures developed in this study include flood modelling, collection and organisation of building inventory data; adopting a set of stage-damage curves; and measuring damage at property level. The quality of damage estimates derived from the procedures is highly influenced by quality of input data. The study also includes the implementation of the damage assessment procedure on the study area (a segment of Kororoit Creek and its adjacent area). The study uses data from a number of sources including Melbourne Water, NEXIS, VICMAP, a quick survey and literature. The developed procedure will help many practitioners in flood loss assessment and natural hazard risk management to face the challenges they have in establishing damage estimates with high accuracy.