FULL CURRENT MARKET VALUATIONS (RV) FAQS
Will a Full Current Market Valuation change my rates?
No, purchasing a Full Current Market Valuation will not change your rates. Rates are assessed based on the Council rating value, which is calculated at least once every 3 years for all properties in the Council area. Council rating values are determined through an independent process and no information from a Full Current Market Valuation is used in setting the Council rating values.
How does a Full Current Market Valuation differ from a Council rating value?
A Full Current Market Valuation provides a professional estimation of how much your property is worth in today’s property market. A qualified QV valuer will visit your property to conduct a valuation.
A Council Rating Value is undertaken by local councils to establish property values at a specific point in time to enable council rates to be assessed. Most councils in New Zealand reassess property values every three years, and hence a rating value is only an accurate measure of a property’s value at the date of the last revaluation.
COUNCIL RATING VALUE (RV) FAQS
What is a rating valuation?
Rating valuations (RVs) are compiled by statute, under the Rating Valuations Act 1998, mainly as a uniform basis for levying local authority and regional council rates.
Rating valuations also serve as a useful guide for property owners and other interested parties, as they are impartial and independently assessed.
Explanation of terms
Capital Value
This is the assessment of the probable price that would have been paid for the property if it had been for sale at the date of the last general revaluation (as shown on your Notice of Rating Valuation). A Capital Value does not include chattels, stocks, crops, machinery, goodwill or plantation trees.
Land Value
This is the probable price that would have been paid for the 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.
Value of Improvements
This is the difference between the Capital and Land Value. It reflects the additional value given to the land by any buildings, other structures or cropping trees and vines present on the property, and any landscaping that adds value to the land.
Annual Value
Annual Value (where assessed) is the greater value of either the estimated gross annual rental less 20% (or 10% if there are no buildings on the land) or 5% of the property’s Capital Value. View an example here >
Ratepayer
The owner is the ratepayer, unless the owner can prove that there is a lease in place that meets the statutory definitions for the lessee to be the ratepayer (Section 11, Local Government (Rating) Act 2002).
How often are valuations issued?
Every property in New Zealand must be revalued for rating purposes at least once every three years according to the Rating Valuations Act 1998. In Wellington and Taupo they are assessed every year. QV Rating is contracted by the individual councils to assess each property's capital value and land value for rating purposes.
Valuation notices are also issued between revaluations when changes are made to properties. Changes include:
- Subdivision of land
- Amalgamation of more than one piece of land
- Changing land use
- Erecting new buildings
- Adding/altering/demolishing existing buildings
- Changes in Resource Management Plans
Is the RV lower than the market value?
While RVs are based on market sales, they are a snapshot of the property market at a single point in time. As real estate generally has tended to fluctuate over time, an RV cannot be expected to represent the true value for long.
Sale price usually includes chattels, while RVs do not include chattels. Chattels can often be quite considerable and include carpets, curtains, light fittings or other items sold with the property such as furniture, pool tables etc.
I'm trying to sell my house and the RV is too low because we've recently renovated. This is now affecting my ability to sell. What can I do?
Where renovation work has been completed that has not required Council consent, it is likely that QV will be unaware so have not included the value of this work in your Rating Value. QV can provide an updated Rating Value to include the renovation work, however this valuation will still be assessed using the market conditions prevailing at the time of the last general revaluation. For more information and an online request form, go to urgent RV update.
How are RVs assessed?
By reference to all of the sales that have occurred in the district prior to the valuation date, and with regard to current building costs. QV Rating is notified of all transactions and we inspect and analyse many sales prior to setting the rating valuations. This process involves researching low or high sales to determine whether or not they are true market sales.
In terms of inspections, emphasis is given to hotspot areas i.e. those where there is significant movement or where special features may influence property prices, e.g. beachfront properties.
In general, capital value is assessed by comparing the property to sales of similar improved properties, while land value is assessed by considering sales of similar unimproved properties. The value of improvements is assessed by subtracting the land value from the capital value i.e. capital value - land value = value of improvements. Depending on the market situation, the value of improvements may vary substantially from the cost, or cost less depreciation, of the improvements.
Do RVs include GST?
The RV includes GST, if any, for residential property. Generally in most residential transactions the parties are not registered for GST. For other property types GST is excluded.
How does the local authority know about changes to my property?
The local authority has copies of all survey plans and building consents. If you make changes to your property which are likely to affect its value, but which are not covered by either of the above approval processes, please advise your local QV Rating office so we can update our records and amend the property's value, if necessary.
How can you value my property without inspecting it?
It is not feasible to inspect every property in the district nor do we consider it necessary. We already hold individual details about your property, which includes a plan of the main improvements, age, materials, floor area, construction type, other on-site improvements etc.
We receive notification of changes to your property, such as subdivisions and building consents issued from the council, and generally we inspect these. We also carry out roadside inspections to record other changes.
How can land value go up but value of improvements decrease?
Assessing your rating valuation involves research into two distinct areas of the real estate market - improved properties and vacant properties, which often behave independently of each other. In redevelopment areas where there is often a strong market for vacant sites while (older and obsolete) properties are not in demand, this occurrence is not uncommon.
Will this valuation increase my rates?
Changes in valuations as a result of the following points may result in changes to your rates:
- Changes to the legal description as a result of subdividing
- Changes to the land area
- Improvements on a property
- Changes in Resource Management Plans
The change will depend on the local authority and whether the authority levies their rates based on:
- Capital value
- Land value
- Annual value
- A combination of capital and land values
- The use of rating differentials and uniform annual charges
Changes to your rates are most likely to occur when the rateable value change of an individual property is different from the average rateable value change for that class of property.
What can I object to?
You can object to the valuation of your property and, when there has been a general revaluation, you may object to the valuation of any other property appearing on the district valuation roll. If there is any data on the Notice of Rating Valuation which is incorrect, please advise us so that we can correct it.
How do I object?
You are encouraged to telephone QV Rating on 0800 787 284 to discuss your concerns first. If you wish to pursue the matter, you will then need to lodge an objection in writing before the closing date for objections shown on the front of your Notice of Rating Valuation. The objection can be either on an official form, or in a letter. In your objection you will need to state the valuation reference number, the address of the property, a daytime contact telephone number, your mailing address, your reason for objecting, and an estimate of what you realistically believe the value should be. You may appoint someone else to act on your behalf.
Object to your rating value.
What happens if I lodge an objection?
A valuer may contact you, and may arrange an appointment to reinspect your property 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. If you are still not satisfied, you may seek to have your objection heard by the Land Valuation Tribunal. You will need to pay a hearing fee.
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.
What is the meaning of “ratepayer”, when I own the property?
For properties, which do not have a lessee as the ratepayer, the owner is shown on the valuation roll as the ratepayer.
In some circumstances, a lessee can be the ratepayer – Section 11, Local Government (Rating) Act 2002.
You valued the new dwelling three months ago. Why do I need a new valuation?
As the valuations are only assessed every three years, the earlier valuation was to update the District Valuation Roll and has a valuation date of three years ago. The new valuation has a current valuation date and is more reflective of today's market.
I objected to the previous valuation and have not heard anything. Will my objection automatically carry over to this year's valuation?
No. We require a fresh objection to be lodged. Please remember that QV Rating can only process objections to rating valuations conducted by QV Rating.