It's been a long time since we reviewed whether our rating system still reflects our district. A lot has changed -- how people live, how land is used, what's expected of local government. This review is about making sure rates are equitable, flexible, and fit for the future.
1- A general rate – charged to properties. This can be set using:
2- Targeted rates – charged to the users of that service (e.g. wheelie bin collection) or where the ratepayer is located.
Your rates include a fixed charge and a variable rate based on the value of the land you own, referred to as land value. This does not include any buildings or commercial crops that may be on the land that you own. Targeted rates may also be applied depending on which services you receive.
Equity
Flexibility
Bigger picture
Some of our rates are currently based on the value of the land you own, referred to as land value. However, most other councils nationwide and in the Otago region, calculate rates based on capital value. Capital value considers both the land and any buildings or commercial crops that may be on the land.
Other parts of our rates are collected on the basis of fixed charges such as our library rate, and community facilities rate.
We are exploring the possibility of changing from land value to capital value and removing most fixed targeted rates because it is more equitable, flexible and sustainable for the whole district.
Other changes may include applying a differential to commercial properties, who often use more council services. This includes utilities who will be required to contribute more than they have in the past to the overall rates total.
We’re exploring a shift from Land Value to Capital Value for the General Rate. Land Value is what QV assesses the land is worth, while Capital Value takes into consideration improvements such as buildings and commercially produced crops (fruit trees, grapevines). Capital Value is much closer to market value.
Different rating models will have different effects on property types – and we’re encouraging our residents to get involved / find out more. Let’s Talk on our website will be the best place to get information.
There are many factors that determine how much rates you will pay. One factor is your property’s value when compared to others. Another factor, and a key one we’re considering, is the size of the rating base. With a shift to capital value, our rating base will expand because properties that had little to no land value, such as utilities, will now contribute more. As a result, most residential ratepayers will see a reduction, while others, such as utilities will pay more.
Proposals for rates review shifts the focus from fixed rates, which has a disproportionate impact on those with lower incomes, to calculating rates based on ability to pay, based on capital value.
Property values are set by Quotable Value Limited (QV). This three-yearly process is independent from council and is audited by the Valuer- General.
Not necessarily. There are three segments in the hydro-electricity supply chain:
While the same company might generate power, and then sell it to users in our region, the way the sector is regulated means they can’t be in control of the entire supply chain. The retail price is determined by the wholesale market, for which there are multiple generators up and down the country.
Yes. Commercially grown fruit trees and grapevines are calculated in capital value. Trees on forestry blocks are not included in the calculation of capital value.
Right now, Central Otago District Council primarily calculates rates based on land value (value of the land, without considering buildings/fruit trees/vines) and fixed charges. But a larger number of councils use a system that considers capital value (value of the land plus any buildings, fruit trees/vines). Changing to capital value will align CODC with many other councils, if amalgamation is chosen as the path forward.
Links to forms to print hard copies of:
Submission Form: https://codc.magiqcloud.com/Documents/docs/~S?DocumentId=2905067&Login=True