Council chief financial officer Mike Fermor told the council’s strategy and policy committee allocation of the general rate had “been contentious for a little while”. The council introduced an up-to-$500 rates remission for the 2023/24 financial years for ratepayers with an increase of more than $700 and a gross household income of no more than $90,000.
“We have 22,000 ratepayers and changing something like the allocation basis impacts all of them,” Fermor said.
Mike Fermor says the last valuation (2022) was completed during a peak in the housing market. Photo / NZME
Councillor Phillippa Baker-Hogan said the community had made strong comments about council “being out of whack” and that “most councils use capital value”.
“There may be no perfect model – there are different communities and different needs – but we want to get answers,” she said. The Rangitīkei, Ruapehu and South Taranaki district councils base the general rate on capital value, as does Horizons Regional Council. The Horowhenua and Tararua councils use land value.
Fermor said the latest land valuation meant many properties in traditionally low socio-economic areas had large rate increases. Suburbs such as Aramoho and Castlecliff had an average land value increase of more than 140%, meaning an average residential rates increase for 2023/24 of 19.5% and 18.7% respectively.
“From a pure rating theory, that is not necessarily wrong,” he said. “There is often no right or wrong answer but it’s something we need to discuss and debate further.”
He told the Chronicle the last valuation (2022) was completed during a peak in the housing market.
“Prices were going crazy and there was a shortage of land and houses,” he said. “If you sat on a large block of land you could, in theory, subdivide and there was demand for those sections.
“Shortly after that district valuation, the market completely changed and the valuation methodology was, perhaps, not as relevant.”
Philippa Baker-Hogan says the community has made strong comments about council “being out of whack” when it comes to its rating system. Photo / NZME
Councillor Rob Vinsen said it would be dangerous if the council got “too emotive” about a particular year of valuation.
“This review has to look at history and judge it on that,” he said.
Speaking to the Chronicle, Fermor said the review would be completed before the 2025 local elections.
“We need to do a fairly detailed analysis and that will be done next year.
“There is a lot of work to be done before councillors are able to say whether it [moving to capital value] is the right move or not.”
Committee chairwoman Kate Joblin said she hoped Whanganui Mayor Andrew Tripe and council management would consider recording the presentations at the workshop “and make them easily available online”.
“Our community can be well-informed with us as we step through the process,” she said.
Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present, his focus is local government, primarily Whanganui District Council.
