Expect no rates drop despite falling GV
Landowners hoping for a rates discount reflecting falling government valuations may be very disappointed.
Whangarei properties have all just been re-valued by Quotable Value as required by law every three years.
Capital values have dropped 7 per cent overall and land values 12 per cent with industrial land values falling the most at 27 per cent.
But owners with a fall in valuation will not necessarily see their rates drop by the same amount.
The land value of a property is used by the Whangarei District Council to calculate part of its rates, again as required by law.
But the council does not get more or less overall income due to the revaluation - the amount of total rate take is set in the Long Term Plan and goes up by inflation each year.
Council spokeswoman Ann Midson says every ratepayer pays a proportion of the total rates based on their land value compared to everyone else's and owners need to compare any decrease against the average.
For instance residential property, land values fell an average of 9.6 per cent. Home owners whose land value fell by 5 per cent will see their rates increase by more than inflation and those whose land value fell by 10 per cent will see theirs go up by about the rate of inflation.
It is only home owners whose land value fell by more than the average - say 15 per cent - who will have their rates increase by less than inflation and maybe even go down.
If there are changes to the market values in between the council's three-yearly valuations, such as a sudden surge in house prices, there will be no affect on rates until the next new revaluation in 2015, she says.
But Christchurch "refugee" Tony Smith says government valuations matter for more than just rates.
He saw many friends and neighbours lose money when central government paid them out for their earthquake-damaged homes.
The payouts were based on a government valuation done more than three years before the fatal February 2011 earthquake.
Mr Smith says he and his wife are lucky their home in the Eastern suburbs was not damaged and they managed to sell it.
The Smiths ensured they paid $26,000 less than govt valuation when they bought in Kamo and gave themselves a bit of wriggle room in case of a disaster or public works. But the house value has dropped $25,000 with the new valuation.
"It's worth $1000 more than we paid for it; it's true market value in that sense."
Mr Smith fears the large drops could see some people now owing more in mortgages than their properties are worth according to the revaluation.
Those who disagree with the revaluation can object to QV by December 20.
- © Fairfax NZ News
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