Kauri Park Motel owners Jacqui Hale and Andrew Leys, of Kerikeri, face a double whammy with increasing rates and the Covid-19 crisis. Photo / Peter de Graaf
Kauri Park Motel owners Jacqui Hale and Andrew Leys, of Kerikeri, face a double whammy with increasing rates and the Covid-19 crisis. Photo / Peter de Graaf
Far North ratepayers will be in for some surprises — good and bad — when their rates bills start arriving next month.
The Far North District Council this month voted to increase its overall rates take by 2.23 per cent, down from the 3.94 per cent it had originally plannedfor 2020-21 because of the impact Covid-19 is expected to have on ratepayers' incomes.
However, that doesn't mean everyone's rates bill will go up by just over 2 per cent.
Some Far North property owners will discover their rates have shot up while others will be charged less than last year.
That's because a large part of each rates bill is based on the property's land value, which is reassessed every three years.
The latest valuations were done last year by independent company QV and come into effect on July 1.
Property valuations are a double-edged sword.
If you are planning to sell, an increased valuation may boost the sale price; if you want to stay put, a big increase may mean you have to pay more rates.
QV's figures, which are based largely on sales data, show land value has skyrocketed in parts of the Far North since the last revaluation in 2016.
In Kaeo, for example, the average residential land value almost trebled from $75,000 to more than $200,000, possibly a result of house buyers priced out of Kerikeri looking further afield.
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Residential land values also increased sharply in Kaitaia, Hihi, Kerikeri and Kawakawa.
However, an increase in land value of 73 per cent — as is the case in Kaitaia — does not mean a 73 per cent increase in rates.
That's because land value only determines what share of the council's total rates take each household has to pay.
If the total rates take is compared to a pie that stays more or less the same size, each ratepayers' slice gets bigger or smaller as property values change.
If your property's land value goes up more than the district's average (which was 37 per cent between 2016 and 2019), your rates bill will go up.
If your property's land value goes up less than the 37 per cent average, your rates bill is likely to go down.
Areas that fit into the latter category include Kohukohu, where land values crept up by just 9 per cent in 2016-19, and Russell, where values rose a below-average 22 per cent, albeit from a high base.
In general, property owners in the Bay of Islands-Whangaroa Ward will get higher rates bills because their land values have gone up most.
Some property owners in the Te Hiku and Kaikohe-Hokianga wards, on the other hand, will see their rates bills go down.
Land value is responsible for the biggest chunk of rates bills but by no means all of it.
Depending on where you live you may also be charged for sewerage, roading, ward rates, and a raft of regional council levies.
Most of those are charged at a fixed rate, which helps offset any changes caused by property value changes.
Commercial premises, farms and forests are charged a different set of rates. Their land values have on average increased less than residential properties since 2016.
Kerikeri businessman Bill Fenton called a public meeting on Monday about the rates rises, inviting business owners and council representatives. More than 30 people turned out, including councillors John Vujcich and Kelly Stratford.
''We're dealing with a pandemic. People are struggling to recover their businesses without the council shoving rates up.''
Business owners he had spoken to in Kerikeri and Waipapa were facing rates rises of 30-40 per cent and Paihia, with its reliance on overseas tourists, was struggling.
Although the council was required to carry out three-yearly revaluations, Fenton said it could have opted for a zero overall rates rise, and it could change the rate it charged on land value.
He also wanted the council to reduce its commercial rate, which is 2.75 times more than residential properties.
The Far North District Council is planning a review of all its revenue, including rates, in a bid to make the rating system fairer and more consistent.
Options include switching to capital value instead of land value, spreading the capital costs of sewerage and water schemes across all properties, bringing back development contributions and reducing the commercial differential.
Moteliers hit by double whammy of Covid, rates increases
A Kerikeri motelier says it seems unfair his rates are going up almost 30 per cent while he's grappling with the effects of the Covid-19 pandemic.
In the latest revaluation carried out for the Far North District Council the land value of Kauri Park Motel, opposite the old Packhouse Market on Kerikeri Rd, has gone up a whopping 67 per cent since 2016.
According to the council's rates calculator, that translates into a rates increase of 29 per cent from just over $5300 last year to more than $6800 for 2020-21.
It's an increase co-owner Andrew Leys says he can ill afford.
''I have to clean a lot of toilets to make that extra 29 per cent,'' he said.
As well as the lease and rates, Leys and partner Jacqui Hale also stump up for staff, financing, maintenance, power and consumables.
Business was down 66 per cent in April and 40 per cent in May and June because of Covid.
''That's tens of thousands of dollars in revenue we haven't got, and we have increased costs on top of that. The council is increasing overheads on businesses that are already distressed and relying on emergency funding. It doesn't seem fair.''
Leys said he realised increased land values in the Kerikeri area, and hence increased rates, were the price of growth, with large numbers of people buying land and moving to the Far North.
''But it's a bit of a killer that businesses have to foot the bill for people who are buying homes here,'' he said.
One of the reasons rates are high, even though the motel isn't connected to a sewage scheme, is because the commercial rate is 2.75 times higher than the rate on residential land.
Leys said he supported a council proposal to reduce the commercial differential, which would reduce the rates burden for businesses like his.
He also questioned what was being done to ensure other accommodation providers such as Airbnb were paying tax and commercial rates to ensure a level playing field.
