Owner says rates hike for new home unfair

Brian and Lianne Swann's three-bedroom house is in a new subdivision in Silverdale, and has a small backyard for their two dogs.

"We moved here to downsize a little bit," says Mr Swann. "But our rates are more than where we used to live."

The couple is still reeling from the shock of opening their mail to see their rates would rise by 35 per cent.

"This is so unfair considering that our previous house in Albany had only had a slight rates increase and its GV [government valuation] is $20,000 more," says Mrs Swann.

The couple hopes it will be among the 5000 ratepayers whose rates Auckland Council is reviewing after an outcry. Most of those homeowners had made improvements, increasing the value of their homes, so were denied a 10 per cent transition cap.

Not every property is covered by Auckland Council's rates transition policy, which caps residential rates at 10 per cent for three years. The cap applies only to what are described as "unchanged properties".

Properties that would fall outside the cap break would be a newly subdivided property; a property where its value has been altered (for example if an extra bedroom had been added); or a property for which the use has changed (such as a residential property becoming a commercial property).

The Swanns moved into their new property on August 5 last year.

WATER WHAMMY

As well as the rates increase, the couple says there's inequity in the way water and wastewater is charged.

"This subdivision hasn't really cost the council anything to build. The developer has to put in the roads, the lighting and the stormwater up front. Every house here has a pump. We had to put in the stormwater pump and the wastewater pump to pump our wastewater into the system. But we still have to pay the same uniform charge," says Mr Swann.

The uniform annual charge of $350 and inequitable burden is required of all ratepayers. Mr Swann says he is not complaining about the total bill so much as the amount of the increase. "I'm complaining about the percentage of the increase. It's neither fair nor equitable," he says.

Auckland Mayor Len Brown has directed council officers to re-assess the impact of rates increases across Auckland. "As Aucklanders know, I am concerned about any increase in rates as a result of the Government's single rating system. That's why I fought for Government acceptance of my rates capping and phasing proposal," he says on his Facebook page.

Mr Swann says the mayor's comments show a lack of accountability. "He keeps saying, when everyone complains, that it's not his fault - it's the Government's or the previous council's.

"He's been there now for two years. He needs to start taking responsibility for what this council is doing, the way they operate and the fact that he was one of the mayors for the previous councils anyway," he says.

On August 1 last year, Mr Swann's rates were assessed at $1735. In May this year, there was a transition rate with an increase of 3.94 per cent. The latest rates assessment is $2373.20.

Adding to his annoyance is that having paid last year's rates bill, with its wastewater component, he must pay a separate water bill, part of which covers a period for which he has already paid.

"We've been paying for wastewater since August last year, but we also paid wastewater charges for our water in our rates bill for the last 12 months as well. They've double-dipped by charging wastewater on both Watercare and last year's rates."

Mr Swann accepts he must pay rates. "But I believe our rates should be capped to 10 per cent as well," he says. "Just because we might be able to afford to pay doesn't make it fair or equitable."

Andrew McKenzie, Auckland Council's chief financial officer, says the council recognises the number of ratepayers affected by home improvements is greater than anticipated, at around 2 per cent of total ratepayers. "Council officers are reviewing this situation over the next week to assess whether any policy change is required and possible," he says. That decision is expected to be made in the next few days.

Mr Swann says for people like him, in a new home, the situation is odd. "Council knew what the value of the new home would be six months ago, it was a fully developed house and they set the rates for 12 months, then there's this increase for 'improvements'?"

WHO'S BEING HIT

Auckland City Council says the new capital value rating system will see fairer rates paid all round. It says, over time, residential properties across Auckland of a similar value will be charged similar rates. Water and wastewater are charged separately. But The Aucklander has found some strange discrepancies sent in by readers.

* A property with a capital value of $500,000 in Hillcrest has received a rates bill of $1774.73 (up from 1586.12 in 2011). Compare that to a property in Henderson with a CV of $320,000 but which has received a similar-sized bill - $1773.93. Although its rates are down from 1879.16 in 2011, the owner says they can't quite fathom how a $500,000 property pays almost the same.

* A property with a CV of $580,000 in Mt Eden has a $2156.32 bill. But a property with a CV of $370,000 in New Windsor has received a bill almost as large - $2012.11 (up from $1973.78 in 2011).

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