Council opts for capital value rating

00:54, Jun 27 2014
CAPITAL VALUE RATING: The proposal would mean lower rates for Hamiltonians in older suburbs, but newer suburbs and larger commercial centres would generally be paying more.

Capital value rating is a step closer for Hamilton after a majority of city councillors decided to "have the courage" to support the change and put it out for public scrutiny.

The change would mean lower rates for some Hamiltonians, especially those in older suburbs and commercial ratepayers in smaller, low-rise buildings. But those in newer suburbs or large commercial centres would generally be paying more.

If introduced the rates change would likely be phased in over 10 years.

The move to go ahead with a proposal statement and public consultation on the plan passed 10 votes to 2.

Councillors Dave Macpherson and Leo Tooman voted against the proposal but others were strong in their support of the idea.

No rating system was entirely fair, councillor Ewan Wilson said, but he thought capital value rating was fairer than the current land value system.


"Let's have the courage and conviction to go out to the people and let's for once and for all make the right decision. Do not be intimidated at the first hurdle," he said.

In 2011, a council proposal to change to a capital value rating system triggered public protests from city residents.

It attracted 2763 submissions with 80 per cent opposing rating on capital value - although under that plan the share paid by residential property owners would have increased.

While the current plan would mean changes for individual ratepayers, the proportion of the yield contributed by each sector - residential, commercial, CBD commercial and rural - would remain static.

"Have the courage. Let's go out with a clear plan, a fair plan, to move this city towards a capital-based rating system and in line with the majority of metropolitan cities in this country. Let's stop being the oddball," Wilson said.

Under the current system there were anomalies like a "little old lady" alone in a house and putting half a bag of rubbish out each week paying similar rates to a multi-level apartment next door, he said.

He found an ally in councillor Angela O'Leary.

"There are winners and losers that will happen if we change from land to capital value. There are winners and losers now," she said.

During her time on council she'd had residents come to her - some in tears - because of their "extraordinary" rates.

"We need to get on with it and try and have the mettle to go through the process, listen to the feedback, keep an open mind and make the decision then. Today is not the time to back away."

But Macpherson was against the proposal and felt the council had approached it from a philosophical - as opposed to practical - viewpoint.

"I actually don't think the [current] situation is so broken that we need to fix this." He would have liked to see some "tweaking" before making major changes.

And Tooman was worried that 17 residential suburbs would see an increase in rates and just 13 a decrease.

He also questioned whether the decision was influenced by the perception that large commercial centres, such as Chartwell's Westfield and the Base, were not paying their fair share in rates.

This was rejected by Wilson, who said it was a pursuit of a fairer system and not an attempt to get those centres to pay more.

But he noted the companies behind them paid more rates in all other major New Zealand cities.

The council has set aside $200,000 for the review, communication and implementation, and has so far spent about $35,000, a city council staff report said.

The proposed capital value general rating system is used by about two-thirds of councils in New Zealand.

Other options considered by council but not recommended by staff were annual value - not used by any council in New Zealand - or the existing land value system.



Rates collected 2012/13 financial year: $129,449,000

Portions of the yield paid by:

Residential 65%

Commercial/industrial 34%

Rural 1%

Waikato Times