Council to vote on changing rates system

AARON LEAMAN
Last updated 05:00 31/07/2014

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City councillors will hold a crucial vote today to decide whether to push ahead with a proposed change to Hamilton's rating system.

Council staff will present a statement of proposal which recommends the city change its rating system from land value to capital value.

A change to Hamilton's rating system will impact residents and city businesses alike, but some councillors are already questioning if sufficient political will exists for change.

Council staff's preferred rating system is the capital value (current yield) rating option which would see residential ratepayers continue to pay about 65 per cent of the city's $153 million rates bill.

However, residents in Hamilton's newer suburbs, such as Rototuna and Flagstaff, would shoulder a greater portion of the yield.

Big commercial operators, such as the city's major retail centres, would also pay a bigger chunk of the yield.

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

Councillor Ewan Wilson said he was keeping an open mind about today's debate but believed a shift to a capital value rating system was in the city's interest.

"I'll listen carefully to the debate but if I had to cast my vote now I would vote for a capital value system," Wilson said.

"But 12 years in local government has taught me that politicians frequently find it hard to make tough decisions. Some will run for the hills and decide it's safer to do nothing."

In 2011, the council considered a proposal to change from land value to capital value for the general rate with no differentials over a five-year period.

The proposal attracted 2763 submissions with 80 per cent opposing rating on capital value.

Wilson said the proposed capital value (current yield) rating option was a vastly different proposition.

Councillor Leo Tooman said there was merit in consulting with the public but he was not convinced the current land value rating system was broken.

Although some residential ratepayers would see their rates drop under capital value, more expensive properties in the city's northern suburbs faced rates hikes.

"A lot of these younger people are on tight budgets and if there are increases in mortgage rates as well, then it will really stretch them," Tooman said.

Councillors may decide not to proceed with the rating review or opt not to adopt the statement of proposal today.

aaron.leaman@fairfaxmedia.co.nz

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