Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

Property revaluations for council rates must be reformed

Property revaluations for council rates must be reformed.


Opportunity to bring controls on rating value changes and more equitable level of annual rates increase

Early indications of the latest 3-year revaluation for council rating purposes show that once again there are going to be winners and losers when next year’s rates are set.

Despite loud noises about rates reform from Auckland’s Mayor and other councils, and promises of action from Local Government New Zealand, nothing looks like changing, and the property revaluation exercises every three years only increases the level of unfairness in the current system.

Most councils receive more than 60% of their operating costs from rates and water rates, despite warnings that such a level of rates income will soon make rates unaffordable for many ratepayers.

Reform is needed and soon, and a start should be made on the revaluation system which causes rates to rise disproportionally and affecting ratepayers who have had no or little change in their financial circumstances.

In any reform of local government funding it is inevitable and generally accepted, that some form of property tax will form part of a total funding package.

With that in mind I suggest a change in the valuation process, initially for residential properties.

Call the new system Council Tax Value.

· All residential properties would be given a Council Tax Value [CTV] as at the latest revaluation date.
· Each year all values would be increased by 2% on the previous year’s value.
· Values of individual homes would also be changed when they were sold and the actual sales price would become the new CTV.
· The CTV would also be changed if additions or alterations requiring a building and/or resource consent were carried.
· The change would generally be upward to reflect increase in value from the additions, but would apply if property was subdivided and value reduced as a consequence. In that event the new property created would be given an initial CTV.
· This process would remove the requirement for tri-ennial revaluations, and would avoid the swings in Rating Valuations under the present system which leads to, often significant, changes in rating incidence on individual properties.
· Under the CTV system most residential ratepayers would face percentage rate increases very close to the average.
· This would result in a more stable valuation environment without the three-yearly bout of stress faced by many ratepayers who appear bewildered by the justification for changes to their rates bill.
· It would be imperative under a CTV system that Real Estate Agents were prohibited from using the CTV as a guide to market value. [Real Estate agents amass their own sales statistics for use in marketing and selling.]

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

Furthermore…

The CTV system also offers an opportunity to set limits to rate rises by setting a percentage of the CTV as the fixed annual increase a council can levy for a specified period.

This is similar to the so-called Proposition 13 arrangement in California.

For example a levy of 0.3% on a property with a CTV of $450,000 would produce $1350. The following year the annual 2% increase on CTV would add $9000 to the value and the tax would increase to $1377.

This type of approach could be used to reduce the reliance of councils on rates and concentrate everyone’s efforts to finding alternative funding sources.

ends

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines



Gordon Campbell: On Dune 2, And Images Of Islam


Depictions of Islam in Western popular culture have rarely been positive, even before 9/11. Five years on from the mosque shootings, this is one of the cultural headwinds that the Muslim community has to battle against. Whatever messages of tolerance and inclusion are offered in daylight, much of our culture tends to be hostile to Islam when we’re sitting in the dark, with popcorn.
Any number of movie examples come to mind, beginning with Rudolf Valentino’s role (over a century ago) as the romantic Arab hero in The Sheik...
More


 
 


Government: One-stop Shop Major Projects On The Fast Track

The Coalition Government’s new one-stop-shop fast track consenting regime for regional and national projects of significance will cut red tape and make it easier for New Zealand to build the infrastructure and major projects needed to get the country moving again... More

ALSO:


Government: GPS 2024: Over $20 Billion To Get Transport Back On Track
Transport Minister Simeon Brown has released the draft Government Policy Statement (GPS) on Land Transport, outlining the Coalition Government’s plan to build and maintain a transport system that enables people to get to where they need to go quickly and safely... More

ALSO:

Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More


Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.