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All owners and ratepayers will receive notices of the revised values via post from 30 November 2009. A full register of the new valuation rolls will be available for public inspection free of charge at the Kaikoura District Council offices, 34 Esplanade, Kaikoura until 15 January 2010.
Objections to the revised valuations must be lodged in writing or online at www.qv.co.nz , no later than 15 January 2010.
Objection forms are available from Kaikoura District Council or Quotable Value Limited and should be posted to:
Quotable Value Ltd – Business Support
Private Bag 39 818
Wellington Mail Centre
LOWER HUTT 5045
Overall Results of the 2009 Revaluation
Overall, property values have decreased from the last valuation done in 2006. The following table summarises the trends; however Quotable Value warns that there are variations across properties dependant upon location and other factors. Council rates are based on capital value – the total value of the property including land, buildings and improvements.
|
Capital Value |
Land Value |
| Overall |
- 7% |
- 9% |
| Residential |
- 13% |
- 15% |
| Commercial |
+ 3% |
+ 1% |
| Rural |
- 5% |
- 6% |
| Forestry |
- 6% |
- 6% |
| Lifestyle |
- 8% |
- 8% |
| Other |
+ 9% |
- 12% |
“If my property value goes down, my rates will go down, right?”
Not necessarily … let us explain
It is a common misconception that if your property value goes down, so will your rates. Unfortunately, this is just a myth. It’s a very complex issue, but let us try to explain this in simple terms.
Let’s say our entire district is made up of only three properties, owned by the Black’s, the Smith’s, and the Macey’s. The Black’s house is valued at $400,000, the Smith’s is valued at $500,000, and the Macey home is worth $300,000. Collectively, the Kaikoura district would have a total rateable value of $1,200,000.
The following shows that, as a proportion of the total value of the district, the Black’s house is worth 33%, the Smith’s 42%, and the Macey’s house is worth 25% of the total district rateable value.
| Black's house |
400,000 |
33% |
| Smith's house |
500,000 |
42% |
| Macey's house |
300,000 |
25% |
|
1,200,000 |
100% |
Now, there has been a new rating valuation done, and as a result of the economic climate, the value of each house goes down (as has been the case with most properties in Kaikoura this year).
Now the Black’s house is only worth $390,000, the Smith’s house dropped to $400,000 and the Macey’s property goes down to $275,000. The total rateable value of the district is now only $1million.
With the new rating values, the table looks like this:
| Black's house |
390,000 |
39% |
| Smith's house |
400,000 |
40% |
| Macey's house |
210,000 |
21% |
|
1,000,000 |
100% |
The important thing to note is that the Black’s property value may have gone down, but its value has not gone down to the same extent as the other two properties, therefore the Black property share as a proportion of the total rateable value of the district has gone up from 33% to 39%. The Smith’s property value has gone down and its value as a proportion of the district has dropped, from 42% to 40%. The Macey’s house value has dropped, and its value as a proportion of the district has also dropped, from 25% to 21%.
So … let’s say Council’s total rates requirement was $6,000, and to keep it simple let’s also say that the total rates requirement doesn’t change, and that all rates are based purely on property value. Fact is; this is not true – some of our rates are a set dollar amount per property regardless of its value – but we need to keep it simple for the purposes of this explanation.
The following table shows that rates increase or decrease depending on each property’s value as a proportion of the total district, because that proportion reflects each property’s share of the total rates requirement.
Old Valuation New Valuation
Old Value Proportion of district Old Rates New Value Proportion of district New Rates
Black 400,000 33% 1,980 390,000 39% 2,340
Smith 500,000 42% 2,520 400,000 40% 2,400
Macey 300,000 25% 1,500 210,000 21% 1,260
1,200,000 100% 6,000 1,000,000 100% 6,000
The Smith’s and the Macey’s rates went down, but the Black’s rates increased – because the Black’s property value as a proportion of total rateable value increased, and therefore so did their share of total rates.
Every year, Council does its best to minimise rates increases on your properties, but as you can see, the district valuation will have an impact on your rates – even if the rates requirement doesn’t change – and this is completely beyond our control.
If you wish to object to your rating valuation, please contact Quotable Values at the address given at the top of this page.
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