2011 rating revaluation

Here are some answers to those frequently asked questions about rating valuations.

Q. When were the valuations done?

The date of valuation was 1 July 2011 and the capital value of each property aims to reflect the market conditions on that day.

Q. Who decides the new valuation for a property?

Every council is required to appoint a valuation service provider (VSP) to review and maintain its district valuation roll.  Council has contracted Landmass Technology Ltd of Tauranga as its VSP.

Q. Will my rates go down, If my property value has dropped?

A drop in value does not necessarily equate to a drop in your rates bill.  Only part of the rates bill is related to the value of your property.  Council still has to assess and collect money to cover expenditure or the cost of running council.  If expenditure increases, then your rates could rise regardless of changes to your rating valuation. 
How much you pay in rates is also due to changes in finance policies - about who should pay for what.  You can have your say about finance policies when Council's 2012-2022 Ten Year Plan comes out for consultation in March 2012.

Q. I'm selling my property, this will affect the value

We recommend you get an independent valuer to give you a market valuation if you're selling, purchasing or refinancing.  This will give an accurate current market valuation of your property.  Rating valuations are for rates only, they don't include chattels.

Q.  If you don't look inside my house, how do you know what it is worth?

Council keeps details on every property which Landmass Technology Ltd use.  When rating values are calculated, a market trend is established from similar properties which have recently sold.  Similar properties have similar attributes such as land area, floor area, age of building, condition of property and location.  Properties are inspected throughout the year to make sure their details are updated where changes have occurred as notified on a building consent. 

Rating valuations do not include chattels such as carpet, curtains, light fittings etc.

Q. I've had a registered valuation done and it differs from the rating valuation?

A market valuation will change depending on the state of the market at the time of valuation.  A rating valuation is set on the date of the general revaluation (1 July 2011) and does not change, except for amendments, until the next revaluation.  Properties may or may not be inspected.  Rates are based on the value of the property.  Rating values do not include chattels such as carpet, curtains, light fittings etc.

If you have made recent improvements to the property, that didn't require a building consent, the current rating valuation won't reflect this. We encourage you to object if the recent valuation is different by over 10%, attach a copy of the market valuation report as evidence to support your objection.

Q. How do the valuations compare with the rest of New Zealand?

The changes are very much in line with other districts in New Zealand.  The property market responds to the factors that are influencing property values nationally.

Q. My valuation is 20% lower than what I paid for it in 2007, explain?

The market has dropped around 20% from 2007 and 10-15% from 2008.  Gisborne has not been insulated from the economic shocks of late 2008.  This has combined with other factors that have maintained the downward pressure on property prices such as fluctuating commodity prices, a slow down in migration and a reluctance or inability to take on debt.

Q.  My improvement value has increased and I haven't made any alterations to my property, explain?

The land value is determined first and then the capital value.  The capital value is what the property should sell for as at 1 July 2011 and is determined by recent sales.  The improvement value is the difference between the capital value and land value.  It's not the cost of improvements, but the added value to the land.  If the capital value is dropping at a lower rate than the land value, then the improvements value could even go up.

Q. My rural property contains lots of uneconomic and non-productive land?

All rural properties have a breakdown of the class of land and valued on a per hectare dependant on the class of land.  The production is measured on effective hectares.

Q. My commercial property is vacant, how is this factored in?

Under the rating valuations act, rating valuations assume that all properties are tenanted and valued at a market rent depending on location, quality of building, vacancy rate etc.

Q. My neighbour's property has dropped or increased but at a different percentage to mine?

We are required to inspect properties where there is a building consent lodged on the property or a sale has occurred.  We also inspect a proportion of properties over the revaluation period.  Probable reason being that the 2008 value could be too low or too high, improvements reworked fully or the owner has improved the property.

Q. Why does Council keep and update property valuations?

Valuations are used by Council purely for rating purposes.  While valuations are updated 3-yearly by independent valuers and audited by the Valuer General, some rating valuations are issued throughout the 3-year period between valuations when property details change.  This may be due to subdivision or building consent.  For rating purposes these valuations must be back-dated to the last revaluation date.

Q. How can my house have a rating value if it wasn't built at the time of the valuation?

Houses that have been newly built or renovated since the valuation receive an updated rating value that reflects what it would have been worth if it existed on 1 July 2011.  As rating values are used to apportion rates for up to 3 years, this keeps all property values comparable and therefore enables Council to allocate rates.

Q. Why is the change in my rating value different from the changes in property values I hear in the media?

Council revalues the properties every 3 years, therefore any changes in rating value is compared with the last revaluation 3 years prior.  Most media coverage refers to changes in property values over the last 12 months.  Therefore different time periods are being reported on, which explains the different figures.

Q. When will the new valuations come into effect?

The new valuations will be used to set your rates from July 2012.

Q. What should I do if I disagree with the rating value on my property?

Unfortunately the objection period closed 31 January 2012.