Why Are Rates Not Simple?

I’ll confine my comments to Waimakariri rates, but much what I say will apply to rating in other New Zealand districts, cities and regions.

An advertised rate increase or decrease is likely to affect properties unevenly.  This is because within a total rate demand, there will be rates and charges that are not based on property value.  Many Waimakariri rates, for instance, are uniform charges that are same for every property within a defined area.  A percentage change in rates may affect these or it may not, but wherever the change applies it will cause different effects on the total rates of different properties.

Changes in land value will not necessarily cause rates to go up or down.  If your property value goes down after a district-wide valuation done by Valuation New Zealand, it does not necessarily mean that your rates wiill go down. To put it in simple terms, if your property value goes down by more than the average drop in property value across the district, your rates will  go down, all other things being equal.  If, however, your property value goes down less than the district average drop in values, your rates will actually go up.

In Waimakariri and in most other ditstricts, cities and regions, there are diffferent rates for different areas.  The water charges in Kaiapoi, for instance, are different from those in Oxford.  The community service charge for Woodend is different from that in Ohoka, and so on.  Sometimes, advertised percentage changes in rates include these.  If an advertised  overall rate increase includes, for instance, an increase in the West Eyreton water charge, it will affect West Eyreton properties much more than the advertised average, but affect no-one else in the district at all.

Increases in uniform charges, e.g. if it were to occur on the Easter Districts (Kaiapoi / Rangiora / Woodend etc) sewer charge, result in bigger percentage increases for lower value properties than on higher value properties.

We also need to remember that in most districts and cities, there are also regional rates, e.g. we in Waimakariri pay rates to Environment Canterbury. Changes in one or the other affect the bottom line of each property diffferently. An X% increase in ECan rates does not mean an X% increase in your total rates.

And that’s just a taste of the complexity!

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