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The Far North District Council is reassuring alarmed property owners faced with skyrocketing land valuations that their rates won't necessarily double or treble just because the value of their land has.
Some rural, central and western Far North property valuations have jumped by nearly 500 per cent under the latest triennial revaluation by Quotable Value.
Across the Far North, 36,800 properties revalued showed an average 104 per cent increase in land value and 62 per cent for capital value since 2004.
Valuation increases of 450 per cent and more have shown up in areas of Hokianga like Kohukohu, while in Rawene on the south side of the harbour, average residential land value has rocketed by 340 per cent on land formerly worth $32,000 but now valued at $140,000. Average residential land values in Kaikohe have gone up by just over 200 per cent.
The Waimamaku Residents and Ratepayers' Association has called a public meeting on Wednesday night. It hopes to get some idea from the council what the new rate bills will look like after July 1 this year.
Association spokesman Peter Oldham says the new figures are based on inflated land values.
"People come up here in summer and say 'we'd like to live here'. The council should have directed Quotable Value to research values better.
"It seems it [QV] has said, 'Here's an area that hasn't got big valuations or services - the valuation needs to go up'.
"We're in an area with the highest percentage of deprivation in New Zealand. We have metal roads, it's an hour to the nearest A" machine and it might be days before the police can respond to something. These things should have an effect on our valuations," Mr Oldham said.
"Valuations have to be in direct relationship to services we receive. Of course, if you're selling, it's nice to think you're going to get a high price but if you don't intend to sell, then rates or any rate increases become extremely important."
He said the council and the community need to be aware of people who are not going to be able to afford to pay their rates.
Council revenue and policy manager Chris Ellington says there seems to be big misconceptions over the relationship between valuation increases and the effect these have on property owners' rate bills.
"As a general rule of thumb, if the land valuation on your property increased more than the average across the district [104 per cent in this case], then you can expect to pay more rates.
"If your land valuation increase was less than the average, you can reasonably expect your rates will reduce," he said.
And if a ratepayer's land value went up at about the district-wide average, there should be very little change in their annual rates bill.
In a study of 34,000 Far North properties using the new valuations, 59 per cent or 20,000 had increases bigger than the district-wide average of 104 per cent while 14,000 properties recorded less than the average increase.
Many property owners would not see major impacts on their rate bills for the new rating year starting on July 1. Every year through its annual plan, the council decides how much work will be done and the amount of money it needs to run the council for the next 12 months. A rate in the dollar is struck, based on valuation rolls, to raise the money needed.
Mr Ellington says if valuations double, the council reduces the rate in the dollar to a level which can generate the amount of rate money needed for the following year. In the Far North, the current rate is 0.0052598 cents.
If the council wants to raise the same amount of money based on the new valuations for the coming financial year, the rate in the dollar would go down by more than half to 0.0023616 cents, Mr Ellington says.
"Because a valuation has doubled or trebled simply does not mean rates will go up by a similar amount."
The council will release its draft annual plan next month but whether rates go up or down, and to what extent, will depend on the amount of work proposed during 2008-09, not on the revaluations, Mr Ellington said.
Meanwhile, a change to capital value rating from the current land value formula is expected to be a preferred option in the Far North when the draft annual plan goes out for public consultation later this year.
