What are rating valuations?
Effect of new valuations on rates
It is important to note that an increase in land value does not automatically mean that there will be an increase in rates. Grey District Council rate assessments contain different charges that make up the annual levy:
- General Rates (calculated on land value);
- a Uniform Annual General Charge (set charge); and
- Targeted Rates (set charge).
Your rateable land value is used to determine how much of the General Rate you pay in comparison to other properties in the district. General Rates are currently used to fund:
- Refuse Disposal Sites
- Flood Protection
- Community Services (Parks and Reserves, Rest Rooms etc…)
- Environmental Services (District Planning and Amenity Management)
What area of the district you live in and what the property is used for determines how much you contribute towards these services (ie residential, rural, commercial etc).
Broadly speaking, what will affect the amount of general rates you pay following a revaluation is how your valuation moves in comparison to others in the district, ie has it increased more or less than the average?.
It is also important to note that Council sets the rates for the coming year in the Long Term Plan or Annual Plan processes each year. These documents detail the projects and services the Council wishes to complete and provide for the coming year and how these will be funded (including rates). It is important that all ratepayers familiarise themselves with these documents and take the opportunity to have their say during the public submissions phase. These documents are available on-line in the Council Publications section.
The Uniform Annual General Charge (UAGC) and Targeted Rates (Sewerage, Water Supply, Kerbside Refuse/Recycling Collection, Refuse Collection, Economic Development Rate - Bed and Breakfast Operators) are set charges and will not be affected by changes in land value. For commercial properties the Economic Development Rate is calculated on the Capital Value.
Explanation of property values
Council levies general rates on the land value of the property (except for the Economic Development targeted rate which is calculated on capital value).
This is the probable price that would have been paid for the land as at the date of valuation. The land value includes any development work which may have been carried out, such as, draining, excavation, filling, retaining walls, reclamation, grading, levelling, clearing of vegetation, fertility build-up, or protection from erosion or flooding.
This is the assessment of the probable price that would have been paid for the property if it had been for sale at the date of the last general revaluation (as shown on your Notice of Rating Valuation). Capital value does not include chattels, stocks, crops, machinery, goodwill or plantation trees.
Points to consider
Rating valuations are completed every three years and are legislatively driven. Properties are valued using a mass appraisal system and objections are allowed free for a short period after which payment is required to change the result.
The rating valuation is a relative number and is based on the market value of a property at a particular point in time. It cannot be taken as a market valuation. While rating valuations are based on market sales, they are a snapshot of the property market at a single point in time. As real estate has generally tended to fluctuate over time, a rating valuation cannot be expected to represent the true value for long. Sale prices usually include chattels, while rating valuations do not include chattels. Chattels can often be quite considerable and include carpets, curtains, light fittings or other items sold with the property such as furniture, pool tables etc.
It is not feasible to inspect every property in the district nor do we consider it necessary. We already hold individual details about your property, which includes a plan of the main improvements, age, materials, floor area, construction type, other on-site improvements etc.
Valuation service provider
Council contracts Quotable Value New Zealand as their valuation service provider. Their contact number is 0800 787 284 or visit their website, www.qv.co.nz.