Rates hit on top of quake damage
The owners of earthquake-damaged homes could be hit in the pocket when new property valuations come into effect in Christchurch later this year, an experienced valuer says.
For the first time in seven years, Christchurch's 165,000 properties are being revalued for rating purposes.
A revaluation was scheduled for 2010 but was put off because of the September 2010 earthquake.
The revaluations, by independent valuers Quotable Value, will be based on recent property sales and will not take into account earthquake damage as they will assume the damage is covered by an insurance claim which will return the property to its pre-quake state.
Christchurch valuer Wilson Penman said the decision to value properties as if the quakes had not occurred was likely to have significant consequences for property owners whose homes were damaged.
They were likely to end up paying more in rates than they would if their property was valued at market rate, as homes with quake damage were selling at significantly discounted prices.
"People who have got damage are going to be paying a lot more in rates than they would be if the valuations were done on market value," Penman said.
On its website, the Christchurch City Council says that although the new valuations will not take into account earthquake damage, they will reflect market reaction to it.
"If prices for comparable properties in your area have risen or fallen, your value reflects this. The new valuations simply maintain the existing practice of ignoring earthquake damage.
"The current year's rates are based on 2007 property valuations which were not adjusted for earthquake damage except where buildings were demolished."
The new property valuations will apply to rates from July 1 this year.
Owners can object to the valuation but earthquake damage is not a basis for objection.
Brent Cairns, spokesman for the Wider Earthquake Communities Action Network, believed the new valuations would be a "big hit for Christchurch".
"Because it's based on recent sales in the area . . . it means properties in badly damaged areas with Technical Category 3 land will see a dramatic drop in their RV."
He expected areas where sale prices had inflated in recent months, such as St Albans and Merivale, would see a "huge increase" in their RVs.
Those with damaged homes could find themselves with a rates hike, Cairns said.
"It's not going to be a consistent process and my advice would be to lodge an objection if you are unhappy with the new valuation."
Ratepayers will have to wait until early March to find out how their individual properties have been valued, but the council expects to be in a position to release information about general valuation trends across the city at the end of this month.
A leaflet informing ratepayers about the methodology being used to reach new property values will be sent out next week with the council's rate demands.
- © Fairfax NZ News
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