City to test public appetite for rating change

21:02, Jul 31 2014

Hamilton ratepayers will be asked if they support a shift to a capital value rating system after councillors opted to test the public's mood for change.

In an 11 to 1 vote, councillors yesterday adopted a statement of proposal which recommends the city change its rating system from land value to capital value. Hamilton is the only major city in the country to use a land value system.

Ratepayers will be asked to submit on the proposal between August 8 and September 8. Councillors will make a final decision on October 30.

Under the proposed capital value (current yield) rating system, the city's 49,866 residential ratepayers will continue to pay about 65 per cent of the city's $153 million rates bill.

However, residents in Hamilton's newer suburbs will, on average, shoulder a greater portion.

Small and medium businesses can expect a rates reduction while big commercial operators such as shopping malls will face a sizeable rise.


Councillor Dave Macpherson voted against the proposal, saying the anomalies in the current land value rating system could be fixed.

He also questioned a staff assertion that a capital value rating system created a better alignment with residents' incomes and ability to pay.

Such a comment represented a "big assumption" and was not necessarily supported by evidence, he said.

"That's the word on the street but there's no proof of that.

"There are plenty of people who would regard themselves as asset-rich and cash-poor," Macpherson said.

Councillor Rob Pascoe supported a shift to a capital value rating system, saying it provided "certainty and fairness" to ratepayers. Councillor Leo Tooman backed the proposal because he wanted to hear what the public had to say on the matter.

Councillor Martin Gallagher questioned a draft letter that will be sent out to ratepayers about the proposal, saying it did not explain the council's position adequately.

The letter indicated half of all residential ratepayers would face a rates increase under capital value, but the council hadn't explained its motive for wanting change, he said.



Rating review timeline

August 8-September 8: The proposal is open for public submissions.

September 29 and 30 and October 1 and 3: Hearings for submitters who want to address the council on their submissions.

October 30: Council to make a decision on the rating system.

Capital value (current yield) rating system

Capital value system calculates rates based on the total value of a property.

Council will collect the same amount of rates and the proposed system will deliver the same percentage yield from each of the main categories: residential (65 per cent), commercial/industrial (34 per cent) and rural (1 per cent).

Council is proposing to spread the impact of the change to capital value over 10 years.

Source: Hamilton City Council

Waikato Times