Anne Gibson

Anne Gibson is the Property editor of the NZ Herald

Auckland rates: Hot property to drive higher costs

With Auckland Council in process of setting capital values, inflated housing market may give owners a shock.

Photo / Getty Images
Photo / Getty Images

Auckland house values have risen up to 51.9 per cent in the past three years, which will impact on rates bills next year.

The Auckland Council is revaluing every home in the city, which in turn will set an average rise in house values overall since the last exercise in 2011, when prices had dipped.

It will likely mean a rates rise for properties above the average overall rise and a rates reduction for properties below the average.

Suburbs such as Pt England (51.9 per cent), Kingsland (47.5 per cent) and parts of Glen Innes (41.7 per cent), which have recorded the biggest three-year increases under latest QV figures, can expect rates rises.

Coastal and rural locations such as Waiheke Island and Warkworth, where property price increases have slowed over the past three years, can expect some rates relief.

But while the latest valuations influence rates, they are not the only factor at play.

A council spokesman said setting rates was complex, with a variety of factors and policies influencing each ratepayer's final rates bill.

These included the latest property revaluations, possible changes to the uniform general charge and the transition to a single rating system.

This is the last year of a three-year transition to a single rating system for the Super City that has capped increases at 10 per cent and phased in decreases for other ratepayers.

At the end of this year, some ratepayers will still face increases from the transition.

The council has to decide whether to extend the policy or impose the remaining increases in one hit next year.

Council and QV staff began the revaluation exercise last month and expect to finish the job in August.

"Rating valuations are calculated using mass appraisal techniques," the council spokesman said.

The techniques took account of what properties were selling for in the neighbourhood, the type of property and rental trends to reflect what was happening in the market to come up with a capital value.

The exercise comes as Local Government New Zealand has this month set up a working party to review the reliance of property taxes as the main funding tool for councils.

The review, backed by Auckland Mayor Len Brown, will examine overseas models using local income taxes, local consumption taxes, congestion charges, visitor charges and payroll taxes.

Salvation Army social policy analyst Alan Johnson called for an increase in the rates rebate available to those struggling to pay.

Tenants make up around half of all Auckland households, but their landlords paid the rates bill so they were largely unaffected. But, he said, retirees who owned their homes and lived on fixed incomes would be worst hit.

Sue Henry of the Housing Lobby said people on fixed incomes couldn't afford higher rates, rising insurance and maintenance costs.

"I feel sorry for the older people. How the hell are they going to pay the rates? People haven't been able to manage the rates for years. More values are being falsely inflated and it's going to get worse," she said.

Grey Power is calling for a 4 per cent national tax rise to replace rates, and Mr Brown wants the ability to introduce tolls and congestion charges to pay for transport projects.

- additional reporting: Bernard Orsman

- NZ Herald

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