A local valuer’s research will ring alarm bells for Queenstown homeowners getting new council rates bills this week.
John Scobie of Colliers has analysed 148 residential properties sold in the Wakatipu between July-September last year, comparing each property’s selling price with its Quotable Value rating valuation dated July 1, 2011.
The 2011 QV valuations affect each property’s council rates for the next three years.
Scobie: “The largest variance was where the sale price was 57 per cent greater than the rateable value. At the other extreme, there was a sale at 41 per cent less than the rateable value.”
Hypothetically, if these two properties each had QV rating valuations of $600,000, by Mountain Scene’s calculation their real market values would be $942,000 for the high-flying house and $354,000 for the other house.
Based on each having QV valuations of $600,000, both properties would have the same annual rates bills of $2372.
Yet according to figures from the council calculating fixed and variable rates charges, based on market value the high-price house worth $942,000 should pay rates of $3066 and the low-price house worth $354,000 should pay only $1872.
Based on market value, the high-price homeowner’s annual rates bill would notionally be $694 higher and the low-price homeowner’s $500 lower.
Asked about rating valuations, QV southern operations manager Brendon Bodger says: “The predominant purpose is for the distribution of rates”.
Valuations are accurate when done but they’re a year out of date before they hit the rating system, he agrees.
However, Scobie’s examples don’t mean overall rating valuations are inaccurate, Bodger says.
“If you’re talking about the odd anomaly around the district, we’re the first to admit they’re mass-appraisal valuations.”
For example, properties are only inspected internally if ratepayers object to rate valuations.
If ratepayers object, QV assessors then do a more detailed inspection free of charge, Bodger says.
The council has issued an explanatory brochure with rates bills sent to households, saying of the latest QV valuations:
“The average movement [in valuations] for the district was a reduction of 9.3 per cent.”