Far North farmers on proposed rates changes: 'We're being milked'

Far North farmers concerned they’ll be hit hard by proposed rating changes, from left, Matt King (Okaihau), Shane Lawson (Ōkaihau), Andrew Brown (Ōkaihau), David Rhodes (Mahinepua), Murray Wright (Waipapa), Dot Dromgool (Mangakaretu) and Laurie Voigt (Kerikeri). Photo / Peter de Graaf

A proposal to change the way rates are charged in the Far North has farmers claiming they're being milked, with their rates bills set to jump by up to 30 per cent next year.

The Far North District Council is proposing a switch from rates based on land value to charging according to capital value, which is the value of the land plus buildings and other improvements.

The council says that's fairer than the current system because the total value of a property is the best measure of a person's ability to pay.

If capital value rating goes ahead the council will phase it in over a 10-year period to soften the impact.

It's part of the council's Long Term Plan 2021-31 which includes an overall rates increase of 5.5 per cent next year.

Other proposals include a district-wide sewage rate and dropping the "commercial differential" from 2.75 to 1.75.

Currently commercial property owners pay almost three times more in rates than homeowners for the same property value, which has long been a bugbear of Far North business owners.

The council is hearing submissions on its plans this week in Kaikohe and Kaitaia.

Far North farmers are up in arms about the proposal, saying they haven't been properly consulted.

Terence Brocx, of Ōkaihau, said he faced a 30 per cent rates hike but little information had been provided to farmers despite ''massive'' changes.

Council documents spelled out the effects of capital rating on residential properties over the next 10 years but didn't delve into the effect on rural properties.

Farmers only had the council's rates calculator to go by and that only went one year ahead.

It was also not clear how much of the increase was due to the switch to capital value rating and how much to other changes.

Ōkaihau dairy farmers Suzanne and Terence Brocx are among those who could be hard hit by the rating changes. Photo / file

Brocx said farmers were already required to spend huge sums on fencing waterways, riparian planting and water reticulation.

''I support those changes, but now we are being asked to pay for urban infrastructure as well. We don't have the votes and we're perceived as being wealthy, so we're being milked.''

Waipapa beef farmer Murray Wright said of 20 farmers he had spoken to only one knew about the proposal's impact.

''It's the lack of transparency. No one can understand how we got here without consultation.''

One of the council's intentions was to look after commercial areas which felt they'd long paid more than their share.

''But the council fails to understand farming is the biggest commercial sector in the Far North,'' he said.

Coastal property owners, such as David Rhodes of Mahinepua, will also be hard hit.

He said his family bought the land in 1966 when no one wanted it. People assumed anyone living on the east coast was ''loaded'' but the income from coastal farming and forestry was marginal.

''I feel for people who live along the coast who are on fixed incomes. They can't keep absorbing these increases. Even as a company, with our rates going from $42,000 to $56,000, (a 33 per cent increase) we'll have to reduce expenses.''

Other property owners he had spoken to were facing increases next year of 10-36 per cent, he said.

''Yes, everyone has to contribute so the Far North can sustain itself and have infrastructure. We don't have a problem paying our fair share, we just feel we are paying way more.''

Far North Mayor John Carter says no decision has been made about changing the district's rating system. Photo / Tania Whyte

Mayor John Carter said changing to capital-value-based rating was a proposal only.

Councillors would make a final decision on May 13 after closely considering the feedback from consultation.

If the proposal went ahead it would not change the total amount the council received in rates, it would just share it out differently.

While some rates would increase by 30 per cent, others would decrease by an equally significant amount, Carter said.

Under the current land-value-based system two properties with the same land value were charged the same rates even if one was bare land and the other had a significant building on it.

''Capital value suggests that property owners with similar property holdings should pay similar rates, and is generally thought to be a better reflection of ability to pay,'' Carter said.

Town planning lobby group Vision Kerikeri also made a submission at Tuesday's hearing in Kaikohe.

Founder Rod Brown said the group previously supported capital value rating but circumstances had changed.

House prices had increased so dramatically in recent years — far ahead of inflation or wage growth — they were no longer a good measure of people's ability to pay.

Many residents had bought their homes before house values became grossly inflated.

''Basing the rates on the paper value of a person's home is simply unfair and unaffordable in the situation where incomes have fallen a long way behind house prices,'' Brown said.

''Although some people in the district have very high incomes, many of us have low or modest incomes and simply cannot afford the huge rate increases proposed.''

Examples given in the council's consultation document show rates for an average residential property in Kerikeri increasing by 6 per cent next year and 70 per cent over 10 years.

The figures for Moerewa show rates increasing by 9 per cent next year and 106 per cent over 10 years.

Currently 71 per cent, or just under three-quarters, of councils in New Zealand use capital value rating.

It's not the first time the council has proposed switching to capital value rating.

An attempt by former Mayor Wayne Brown in his first term was rejected or, in his words, ''howled down''. Brown said capital value was fairer and fluctuated less than land value.

Other proposed changes include a district-wide levy for water and sewage systems instead of charging ratepayers for the scheme they are hooked up to, which is often unaffordable in small communities.

A total of 770 submissions were made to the Long Term Plan.