What Does “Capital Value” Mean?
This is the assessment of the probable freehold unencumbered price that would have been paid for the property if it had been for sale at the date of the latest general revaluation. The valuation does not include chattels, stock, crops machinery, or trees. The valuation is deemed to include GST, if any, for residential property and exclude GST for other property types.
What Is “Land Value”?
Land Value is the probable freehold unencumbered price that would be paid for the bare land as at the date of valuation. The Land Value includes any development work which may have been carried out, such as draining, excavation, filling, retaining walls, reclamation, grading, levelling, clearing of vegetation, fertility build-up, or protection from erosion or flooding.
What Does “Value Of Improvements” Mean?
This is the difference between the Capital Value and the Land Value. It reflects the added value given to the land by any buildings or other structures present on the property, and any landscaping that has been done.
How Does The Local Authority Know When Changes Have Been Made To My Property?
The Local Authority has copies of all survey plans and building consents. If changes are made to a property which are likely to affect its value, but which are not covered by either of the above approval processes, Council should be notified so that their records can be updated, and the property’s value amended if necessary. If the values are changed a new valuation notice is issued.
When Are Revaluation Notices Issued?
The effective date ot the Taupo Districts most recent revaluation is 1 July 2007. The next revaluation year is 2010.
What If I Do Not Agree With The Revaluation Of other Properties Within the District?
If you are a ratepayer within the district you may lodge an objection but you must stipulate within your objection that you are objecting as an ‘interested party’.
How do I object?
The official rating valuation objection form can be printed off the Council’s website (click here?) You can also contact the Council and request the form to be posted out to you. You can write to Council to explain your objection; however it is best to do this on the specified form as there is certain information required for the objection to be accepted.
Download the Objection to Valuation Form ( 54 Kb PDF)
What Happens When I Lodge An Objection?
All properties that have an objection lodged against the values are inspected, it is a legal requirement. A valuer may contact you, if the inspection and consequent review cannot be conducted from the outside of the property to arrange an appointment for inspection to verify the property records, and update them where necessary. The outcome of the consideration of your objection will be advised to you in writing.
What Happens If The Valuer And I Cannot Agree On A Valuation For My Property?
You may seek to have your objection heard by the Land Valuation Tribunal. You will need to pay a hearing fee of $22. At the Land Valuation Tribunal hearing you will be required to state your estimate of the value and provide evidence to support your claim. This evidence would normally be information about sales of similar properties, which occurred at, or near, the date of the valuation being objected to. The Land Valuation Tribunal will make a decision based on the evidence presented.
Why Has The Improvement Value For My house Gone Down?
As per accepted valuation practice when assessing the value of a property there are two values assessed, the land value and the capital value.
The land value is the price that the bare land would sell for as at the valuation date.
The capital value is the price that the property, with all improvements on the site but excluding chattels, would sell for as at the date of valuation.
The value of improvements is merely the difference between the capital value and the land value. Therefore in an area where land values are increasing at a faster rate than capital values the value of improvements will decrease. This is common in areas where there is strong demand for vacant land as is the case currently in Taupo.
This is the accepted valuation approach as improvements are seldom sold separately, while land sales and improved property sales are readily available.
Because the Value of improvements is arrived at by a process of subtraction using information that is available (ie sales) the value of improvements can often bear no resemblance to any replacement cost or depreciated replacement cost as it only represents what a purchaser is prepared to pay for the improvements. In cases where the site is sold for redevelopment this can be a negative value to the purchaser. At the other end of the spectrum buyers are often prepared to pay very large amounts for attractive old homes, well above what it would cost to build a similar sized new house.
Often property owners have worked out a replacement cost of their property and have failed to consider that the current property built perhaps 30 years ago is not of the style or type that would be built today, and that it is also part way through its expected useful life as a dwelling. Or they have depreciated the replacement cost of the dwelling at some figure such as 1% per annum or the current IRD depreciation rates. As depreciating replacement costs does not reflect what the market does this method seldom bears any correlation to what the property would sell for on the open market.
Who Oversees That The Values Used To Calculate My Rates Are Correct?
The Rating Valuations Act provides that the Valuer General sets minimum standards and specifications necessary for the maintenance and upkeep of district valuation rolls in the interests of ensuring a nationally consistent, impartial, independent, and equitable rating valuation system. The Office of the Valuer General monitors, audits and certifies revaluations.