Hawke’s Bay Regional Council adopts rates shake-up despite almost 90% opposition from submitters

Hawke's Bay Regional Council has made a decision on the controversial rates proposal. Photo / NZME

Hawke’s Bay Regional Council has decided to switch from land value (LV) to capital value (CV) to calculate its rates, meaning many homeowners will pay more in rates and farmers and forestry owners will pay less.

The decision was made on Wednesday during a lengthy council meeting, despite almost 90 per cent of submitters (477 out of 541 submitters) opposing the change.

Councillors voted 8-3 in favour of switching to capital value to calculate each property’s proportion of regional council rates.

Capital value considers the value of both the land and the improvements on a property, such as buildings, rather than the value of the land only.

The move will have a significant impact on some properties including many homeowners.

Councillor Jerf Van Beek, who voted to keep land value, shared his disappointment about the decision in the meeting.

“I apologise to our submitters and to the public that we once again have failed in a consultation process, where I believe the public wanted us to [retain] land [value].”

Councillor Martin Williams said, in response, that councillors who supported the change had to take on board all the information they had available, which he believed supported moving to CV as a fairer model.

Other councillors also cited that they had to think about people who did not submit on the proposal.

The regional council made a range of other decisions during the meeting, all to do with changes to its rating system, with the most significant being the shift to capital value.

None of the changes will see the council collect more rates overall, but will change the proportion of rates each property owner pays.

Hawke's Bay Regional Council chairwoman Hinewai Ormsby supported the change to CV. Photo / NZME

On average, according to consultation documents, most homeowners will pay more on their rates bills, while farms and forestry blocks will pay less.

There was some contention over whether the switch would impact negatively (cost more) for homeowners in low-socioeconomic areas like Camberley or Flaxmere.

Some councillors believed it would cost them more, while some believed it would cost them less.

Some farms and forestry blocks stand to save more than $1000 on their annual rates bill under the changes, while some homeowners will pay over $200 more on their regional council rates.

Most property owners will have smaller increases or decreases in their rates.

The likes of farms experience reduced rates because they do not have much capital on their land.

Trees on forestry blocks are not counted as capital, according to valuations used by the council, which means they will also receive large reductions in rates.

The rates changes will take effect from July 1. All regional councils around New Zealand are now rating using CV, except for one.

Other changes adopted by the council on Wednesday included simplifying and changing some targeted rates, and moving some targeted rates to the general rate including much of its pest control.

The way to check if your property will pay more in rates is to use the figure 1.78.

Divide your capital value (for example $700,000) by your land value (for example $400,000) and if the figure is more than 1.78, you can expect an increase in rates. If it is lower you can expect a reduction in rates.

Gary Hamilton-Irvine is a Hawke’s Bay-based reporter who covers a range of news topics including business, councils, breaking news and cyclone recovery. He formerly worked at News Corp Australia.