District valuations increase significantly for rural sector

For more on district revaluations visit the project page here.

Every three years councils must get an independent valuer to value all the properties in its district. By law these valuations must be used as a basis to charge rates so a change in valuations affects every ratepayer in the district. A change in district values does not change the total amount of rates Council collects but it can change who pays for it.

"According to our valuer (Landmass) there will be small valuation changes for urban residential properties (average 1.7%), some increase for commercial and industrial properties (average 8.6%) and a significant increase for rural properties, especially dairy farms (dairy average 42.4%)," said Council's Deputy Chief Executive Ben Smit.

"The valuers noted that individual property value increases can be significantly different from the average. This is especially so in the dairy sector where the impact of dairy conversions, the amalgamation of properties and other improvements (like irrigation) have increased the average value of dairy farms."

"Increasing property values are a sign of economic growth, so Council is pleased that in general we have seen across the board increase in value," continued Mr Smit. "However, it is very unfortunate that the increase in property values has resulted in an increase in general rate for dairy farmers. This comes at a time when milk prices have dropped."

Council has met with Federated Farmers to discuss the issues and will continue to engage around this challenge.

"When property values change the total amount of rates Council collects doesn't change, just how we 'slice the sector pie'," he continued. "If the valuation of all properties changed by the same percentage - the revaluation would have no effect on rate increases."

To understand why rate increases are disproportionate across the sectors - urban residential, commercial, farms among others - we need to understand how properties are rated in the South Waikato.

• Every property in the district pays a portion of rates as the Uniform Annual General Charge (UAGC). This UAGC is a uniform charge regardless of property value.
• Another portion of rates is the General Rate. This is charged to each property based on capital value of the property.
• Urban properties also pay a portion through targeted rates like refuse collection, stormwater, sewerage, halls among others.

This means that higher valued properties will pay more general rates that lower valued properties. Furthermore your general rate portion will go up or down depending on whether your valuation increases by more than the average valuation increase.

Please contact Council if you are the owner of a property in the South Waikato and have not received a valuation notice by 23 December*.

More detailed information will be available on our website from 16 December 2015. Ends: words: 447

* please note our offices are closed from 3pm on Thursday 24 December and reopen Tuesday 5 January at 8am