Rateable Devaluations in NZ

[powerball]

Hi there

We have received notification in the last few days that the rateable values on our properties in Mount Maunganui and Wellington have gone down by alot (ie. $455K down to $410K; $1,170,000 down to $990K; $585K down to $515K; and $545K down to $485K). All high quality stock in prime, central locations - seems crazy to us. The previous rateable values were done in 2006 and 2007 before we did full renovations on these properties and got registered valuations at that time to back all that up. We rung a couple of registered valuers this week who said "not to be to concerned as no one takes much notice of the rateable valuations and they also said they were calculated at the worse time possible - being June/July 2009."

We will be objecting however would appreciate if anyone else has any thoughts.

[rueben]

I wouldn't worry about it. Means you pay less rates. If you are wanting to sell, just get a registered valuation to back up your price.

[Dean@Massiveaction]

Objecting?? Why. I've just had over 30 GV drops, anything that is driving prices down in vendors minds is to be commended. Celebrate at the lower rates bills and forget about it IMHO.

[powerball]

Yeah right Dean, any price drop to the vendors can be commended!! Tell that to your Sponge Bay buyers - IMHO.

[freezinhot]

I was just about to say the same, low GV low rates, only worry about what you can get for it when the time comes to sell.

FH

[muppet]

Means you pay less rates.

No it doesn't.
Council rates never drop. They need money to run the show so they keep putting the rates up.
Councils are bottomless buckets.
When was the last time rates went down?

[freezinhot]

Sorry I meant if you have higher RV you will likely pay more rates, of coarse they will not lower them, me thinks!

FH

[Orkibi]

anything that is driving prices down in vendors minds is to be commended.

I agree with Dean.

Time to look at buying in Tawa where some CV's gone down by 30%.

[muppet]

If CVs have gone down then your LVR has gone up and the banks may start looking more seriously at you.

[Orkibi]

If CVs have gone down then your LVR has gone up and the banks may start looking more seriously at you.

CV are nothing but valuation to determine the rates. --- in most cases, sometime they are handy when they are low.

if they are low, whats stopping you to get a register valuation to support the LVR ?

[DaveW]

Rates are calculated from the "Land Value" portion of the GV only. You can object to increase the "Improvement Value" if you can back this up with renovation work and this will not impact your Rates.

[Tan]

I know that Rateable values are not meant to affect actual property prices, but they can. My Tauranga property was valued at $234,000. The tenant asked if they could buy it last week when I said it was going on the market. They are simple people with no idea about property, so I used the RV to back up my price. I think it is worth about $235,000 in my hand. If I went all out and marketed it, it should sell for $250,000 due to it's great location and lack of competition in the area. I would use an agent.

Now I guess all the tenants are hearing is that values have decreased. Their non-homeowning mates will be discussing it with them too. I looked up the website last Friday and it is now valued at $219,000. If there is a problem, I'll just sell on the open market (and probably for a higher price), but the RV will have caused the glitch - and those people missing out on home ownership.

The other thing with that property is that it is on an 80% mortgage based on RV. That shouldn't be a problem as I always pay the mortgage and the bank can't call in everyone like that, but it is a consideration. Luckily it is with it's own bank, and my highest leveraged.

Anyone will tell you that RV is irrelevant to price, but surely we all keep it in the back of our minds, use a low one as leverage to get a price down when purchasing, and a high one to nudge it up when selling?

[Wayne]

Rates are calculated from the "Land Value" portion of the GV only. You can object to increase the "Improvement Value" if you can back this up with renovation work and this will not impact your Rates.

Depend on the council I think. Christchurch uses improved value. Hamilton use land for Hamilton City Council rates and improved value for Environment Waikato rates.

[Wayne]

Anyone will tell you that RV is irrelevant to price, but surely we all keep it in the back of our minds, use a low one as leverage to get a price down when purchasing, and a high one to nudge it up when selling?

Get a registered valuation to back up your story. Ratable Value is a good leaver against people who don't know better.

[Wayne]

No it doesn't.
Council rates never drop. They need money to run the show so they keep putting the rates up.
Councils are bottomless buckets.
When was the last time rates went down?

Total rate take never goes down but the distribution does change. So if every property drops by 30% then rates per $ value goes up by 30% to make the rates take at least neutral.
If you then increase the value of your property relative to your neighbours then you will pay more rates!