Auckland Ratepayers crucified by valuation system

Rates changes range from increases of more than 40% to decreases of more than 40%

All groups of ratepayers in Auckland are facing changes in their rates ranging from increases of more than 40% to decreases of more than 40%. - this huge spread applies to business, rural and residential properties

Hardest hit are the 126,000 residential ratepayers who face a rates increase next year of more than 10% - including 51,000 who will have to deal with a more than 15% increase.

The Mayor’s claim of a 2.5% increase means nothing when actual increases will average around 6.2% .

Auckland Council is looking at possible ways to soften the impact of these increases with some form of transitional plan to place limits, or caps, on the percentage of increases together with a limit on the percentage of decreases.

Council staff are recommending against any such a plan, stating that ratepayers should ‘take it on the chin’ this year because this would meet the Mayor’s aim of all properties of equal value should pay the same amount of rates.

Whatever the decisions being made for next year’s rates the same problems will arise in 3 years’ time when another revaluation must be carried.

Ratepayers are being crucified by a seemingly endless pattern of unaffordable and unjustified rates increases based on the unrealised estimated market value of their homes.

Property values are the backbone of council income by way of rates.

Changes in those values have no impact on the total amount of rates councils collect but as todays situation shows, value changes affect what each ratepayer payers, irrespective of their income and ability to pay.

A full review of the valuation system for rating purpose must be initiated urgently to prevent a repetition of today’s chaotic position in Auckland.

And the rest of the country should be alert to this position, especially those areas which are considering forming “SuperCity’ councils.

[Other countries have valuation systems which avoid this sort of chaotic and unreasoned approach to local taxation. For example parts of the UK have a system of valuation bands and there has been no general revaluation for more than 20 years. California and other states have capped valuation changes for taxation purposes]

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