A Tale of Two Properties (and their rates)

Waimakariri rates demands are hitting letter-boxes about now.

 You might be interested in this comparison between two properties – one in Rangiora and the other in Christchurch.

 

Land Value

Capital Value

District / City Rates

ECan Rates

Rangiora $34 000 $123 000

$1552.60

$82.90

Christchurch $72 000 $325 000

$1442.29

$238.45

Note that Waimakariri rates on Land Value, whereas Christchurch and ECan rate on Capital Value.

 So why does a low-value Rangiora property get rated higher than a Christchurch property with a much higher valuation?

 There are at least three reasons, but one is particularly relevant:

  1. Christchurch has sources of income that Waimakariri doesn’t have (e.g. several companies owned through Christchurch City Holdings Ltd).
  2. Christchurch can achieve economies of scale (e.g. Christchurch’s new ocean sewerage outfall will cost about $87m. Waimakariri’s, servicing less than a tenth of Christchurch’s population, cost about $35m).
  3. Waimakariri rates are heavily loaded with uniform charges …. read on!

 Look at the second column of your rates assessment for the year and you will see a number of rates are “fixed”.  This means that no matter what the value of a property, every property in the area covered by the charge will pay the same. 

 For instance, every property in Rangiora, Kaiapoi, Woodend, Pines/Kairaki and Waikuku Beach pays the same sewerage charge – but Oxford pays a different one because they have a separate scheme.  Every property in Rangiora pays the same water charge, but this is different from that paid in Kaiapoi.

 For Rangiora properties, the total of fixed charges is $1450.50 (Kaiapoi’s and Woodend’s will be different).  Note that this is higher than the rates paid by the Christchurch property above – it is impossible for a Rangiora residential property with a house on it to pay $1445!

 On the two properties above the uniform charges are:

Rangiora $1450.50
Christchurch $197.00
ECan (both properties) Nil
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