WDC general manager corporate Alan Adcock said the redistribution proposal was based on the principle that people in lower-end areas had less ability to pay. This was potentially concerning for the council's rates income.
"Some ratepayers in higher increase areas may be on lower household incomes so the increased rates burden may be more difficult to pay," Adcock said.
The topic featured in a WDC briefing meeting this week, ahead of the council later this month formally deciding on the redistribution proposal that would then go out for targeted Annual Plan 2022/2023 public consultation, starting in April.
Adcock said the major lower-end land values lift was the result of a housing shortage in the face of rising demand and lower-end properties being all that was available for those looking to buy.
The proposed changes would see residential properties with land valuations of about $100,000 or less being the focus of the proposed shift to lower overall rates. Those with land valuations above that would pay an increasingly large extra portion of rates.
Homeowners' WDC rates were made up of a combination of three aspects – a flat annual base rate charge for council services (uniform annual general charge or UAGC), targeted rates (for things like water) and general rates (rate in the dollar or RID) based on an individual residential property's land value. The RID component saw a homeowner pay a set rating charge for every dollar of their property's land value.
The council was looking to potentially lower the UAGC - the lower it is, the more the rates burden shifts to higher-value properties. This fixed UAGC is paid across all properties.
The proposed shift enabled the RID rating component for those at the lower end to begin from a reduced starting point. Their individual total rates bills would include a smaller portion of rates for each dollar of their land's value (RID)s than before.
Whangārei residential landowners were currently paying $724 UAGC for the 2021/2022 financial year. This was already formally set down to increase to $756 for 2022/2023.
Councillors at this week's briefing meeting were generally in favour of instead cutting that charge to $650.
Adcock said many of the lower-end properties affected by major land valuation increases were in areas of high deprivation.
He cited the example of an Otuhiwai Crescent, Tikipunga property with a high social deprivation rating whose revalued land had gone up by 174 per cent from $149,000 to $260,000.
Adcock said all residential land revaluations, including those significantly below or above the district's average, included properties that tended - to varying degrees - towards being exceptions to the above general positions.
Whangārei district's average residential land value in November 2021 was $421,000 up from $281,000 in 2018.
November's revaluation saw 17 of 33 Whangārei district areas monitored experiencing increases in land value above the 51 per cent district average – and with that the prospect of 2022-2023 rates rising significantly.
Whangārei's residential revaluations across the 33 suburbs and district settlements could be viewed at www.wdc.govt.nz/valuations
