Council considers rates proposal
At its meeting on Wednesday (16 December), Council will decide whether to accept a proposal to change the way rates are set. If Council supports the proposal the community will have a chance to have a say in the New Year through a process of consultation and hearings.
A previous proposal to use capital value as a basis to set general rates was presented to Council in February 2018. It was rejected after community submissions and feedback.
Council’s group manager corporate services Dean Phibbs says Council has listened to prior community feedback and the proposed rates model reflects this and uses land value as a basis for setting general rates.
“The rates policy review has always been, and still is, about simplifying the system so that comparable properties pay a similar amount in rates, the system has fewer differentials, and is more straight forward to administer.”
To assist Council, determine its direction on simplifying its rates policy, community consultation occurred in 2014 and 2017.
The current rating system has 42 differentials with the result that comparable properties are not paying comparable rates. Mr Phibbs says in some cases, the variances are extreme.
“A residential property in Westport township with a land value of $100,000 is being charged $1,110 in variable general rates. A property with the same value near Punakaiki is paying as little as $107.”
Another example provided by Mr Phibbs shows a commercial property in Westport with a land value of $100,000 being charged $4,434 variable general rates while a Charleston commercial property of the same value pays $172.
In other cases, the variances are minor with some farming rates varying just $6 per $100,000 of land value and there is no need to have two different rates for them.
Under the current system many properties with similar values don’t pay similar general rates, even though general rates pay for all of the services that benefit the whole community.
Council has considered the way general rates are collected. General rates are collected in the form of both a value-based general rate (variable rate depending on the value of a property) and a uniform annual general charge which is a fixed amount per property.
Council has reviewed general rates only. It is not proposing to change how targeted rates are calculated. The proposal suggests how much the fixed amount per property should be, and how the variable amounts should be collected from ratepayers. If the proposal is adopted, a redistribution of rates will occur. This will have a financial impact on every ratepayer.
Mr Phibbs says the effect on some ratepayers will vary.
“Depending on how out of line from the average rates for their sector they have being paying, some will pay more some will pay less. This makes setting rates is a complex and challenging task.”
-ENDS-
For more information please contact
Dean Phibbs
Dean.phibbs@bdc.govt.nz