Upper Hutt City Adopts New Rating System

Upper Hutt City Council has adopted a new rating system based on capital value of the property worth rather than land value.

The move, made at a special council meeting held on Wednesday September 4, will see the rates for utilities, land and buildings, rated on their capital value and will bring the rating system in Upper Hutt inline with many city councils around the country.

The decision was made after a lengthy consultation process with the ratepayers of Upper Hutt that began in March 2002.

Capital value is a calculation of the value of the land plus everything that is built on it and uses figures calculated by Quotable Value NZ Ltd.

The biggest change will mean that utility companies such as telecommunication, power and gas companies will now have to pay their rates share as previously their assets such as lines and pipes were not rated. Recent court rulings showed that these utility assets should be rated and the companies should pay their fair share of the rates slice.

Rating utilities expands Upper Hutt City Council’s rating base and this means that other ratepayers will pay less this year than they would if utilities were not being rated.

The change will have little effect on the majority of property owners in Upper Hutt however, a small number of ratepayers will experience significant changes either up or down although this will not necessarily be due to the change to the new system says Mr Guppy.

“Significant changes in property valuation which was undertaken by Quotable NZ last year, will mean that rates will go up for some homeowners. While this is an advantage for them that their property is increasing in value, it will unfortunately mean higher rates for some.”

Upper Hutt Mayor Wayne Guppy says around 8,000 property owners will see a decrease in their rates.

“There are always winners and losers in any system. For the overall benefit and future progress of the city, the right decision has been made,” Mr Guppy says.

Upper Hutt City Council will conduct another rating review later in the year that will look at a small number of anomalies that may arise under the new capital value system.

The implications of the new Rating Act that comes into force next year will also be considered.

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