Relax, your new rates bill is not that bad.
The average home value in the Taupō district increased by 38 per cent in last year's Taupō District Council revaluation exercise, however that doesn't equate to an average rates increase of 38 per cent.
The new rating year started July 1 and although the council promised a zero per cent general rates increase, the actual amount each household will pay will go up an average of 4.9 per cent due to the revaluations.
Taupō mayor David Trewavas confirmed in June that council were committed to a zero per cent general rates rise due to help ease the burden on ratepayers post Covid-19.
A letter writer to the Taupō & Tūrangi Weekender queried the zero rate increase, saying as property valuations have gone up, the dollar value households pay in rates will be more, calling the publicity around the zero rates increase "a rates increase by stealth".
Rates 101 with Taupō District Council head of finance and strategy Alan Menhennet reveals the amount of rates money collected is not based on property values. The rates are set according to the district's budget as laid out in the Annual Plan.
"If you think of the council's rates income as a pie, the size of the pie does not get any bigger as a result of the revaluation. However, a ratepayer's slice of pie might get bigger or smaller depending on how their property value has changed in relation to the average change of the district.
"As a result of significant increases in residential property valuations there will be an average redistribution of rates of 4.9 per cent district-wide," said Mr Menhennet.
He explains that other factors also come into consideration. For the 2020/21 financial year there are 218 more residential properties contributing to the rates fund and this brought the average rates rise down 0.43 per cent.
"The number of rateable residential properties increased from 22,986 to 23,204 from last year to this year."
When mayor David Trewavas announced a commitment to a zero per cent general rates rise, those not used to rating jargon may have overlooked the importance of the word 'general'. Mr Menhennet explains there are general rates and targeted rates.
"Last year, the council collected $44.82 million in general rates. In the 2020/21 year we will collect $44.82 million in general rates and this equals a zero per cent increase.
"Last year, the council collected $25.646 million in targeted rates. In the 2020/21 year we will collect $26.006 million in targeted rates. This is because the number of rateable properties has increased and is not due to an increase in targeted rates."
Property owners were informed just before Christmas of their new council valuations. Opteon carried out the valuations for the Taupō District Council using a mass appraisal process. The valuations are a snapshot in time as at July 1, 2019, and are collected solely for the purpose of setting rates.
Home values in Mangakino shot up by a massive 93 per cent, while Tūrangi and Kinloch home values increased by 59 per cent and 37 per cent respectively.
In non-residential property, lifestyle blocks went up 42 per cent in value, commercial and accommodation properties increased in value by 23 per cent, and industrial property rose 18 per cent. Poor returns in farming were reflected with pastoral farms increasing in value by 11 per cent and dairy farms devaluing by 6 per cent.
Homeowners on low incomes can apply for a partial refund on rates they paid in the 2019/20 financial year, running from July 1, 2019 to July 1, 2020 via the Rates Rebate Scheme. For the 2019/20 year, 1,112 home owners received a rates rebate in the Taupō district. The scheme applies to rates paid to both the Taupō District Council and the Waikato Regional Council.
This year the income threshold increased so more homeowners will be eligible. Those applying for the rates rebate scheme must have an income of less than $26,150. However if you earn more than $26,150 you still may be eligible for a rebate. Applications for a rate rebate for the 2020/21 year open on August 1.