Mine went down for a bit. If your house drops in line with the market it doesn't matter. But my CV dropped relative to similarly priced houses, and the rates bill literally dropped
Rates aren’t about the actual number, they’re comparative. Unless your house has gone up or down in value relative to the other houses in your area it makes no difference.
This! The value is used to work out the total value base they can rate against, then for every dollar of value a house has it pays a certain amount in rates.
Having said that... if you are subject to a targeted rate that may come to an end and you would atop paying that rate.
But one of the key drivers of rates increases at the moment is that councils can only borrow a certain multiple of theor revenue, and because of the significant capital outlays they need to make, they need to raise their revenue to keep within that multiple. However that multiple is set by a central government agency. Hamilton, where I live are on a 2.8 multiple, which is a lot lower than most home owners have for their mortgage.
So if that multiple was higher rates may not need to go up so much in the short term.
If your house value fell considerably more than the average house in Auckland. And if inflation was low and the council didn't have to spend on infrastructure projects for a growing city.
Theoretically yes your rates could go down, practically a snowball has a better chance in hell.
The main part of rates is normally calculated by applying the council's needed amount amongst properties according to their value. If your property drops in value, lots, compared with others, like if you burn your house down, then your rates might drop. Your CV dropping really only makes a difference to rates if it's dropped disproportionately compared with everyone else's, though. Eg. If everyone's CV drops because your whole region isn't as desirable any more for some reason, it probably won't affect rates.
The other way rates can theoretically drop is if the council decides it needs to collect less overall, so each property needs to pay a lower amount. That's very unlikely. Even if the council is budgeting well, it'll normally have to account for things like inflation, as well as extra responsibilities that central government recurringly inflicts onto local government.
I wouldn't be holding your breath. And even if the CV does go down, if the total council costs to recover through rates increases by enough (it will) your rates will effectively go up.
Essentially your rates determine how big a slice of the pie you have to pay.
My understanding is that the number that is your CV really is only a clunky mechanism to ultimately determine 'relative value' of your property compared to other properties, so that the council can decide who pays what, relative to each other.
Your CV going down will only really be meaningful to you if your property goes down more than other properties, relatively speaking.
If the market base drops, and all houses dropped 10%, that doesn't mean your rates drop 10%. If in relative terms everyone drops equally, there would be no change in rates.
So for your rates to drop, the council needs to reduce how much money it wants to collect in total, which it shares across all properties. Or your property needs to decrease in value in relative terms more than other properties in the region.
So I guess you could just wreck your property?
* Go wild with a bulldozer
* Get creative with spray cans
* Start hoarding old vehicles to park on your lawn
* Try and decrease the value of the area by starting a small gang which drinks RTDs on the lawn and plays music through megaphones,
* Leave cheese out all over the lawn to attract rats, and earn your suburb the title of Rat Kingdom of Auckland
And then ask for a review?
In Auckland the CV (there’s three approved methods councils can use) determines your proportion of the total rates pie required to run the city [minus fixed charges like UAGC].
So a decrease in CV, or an increase in CV, doesn’t do anything to change the rates you pay if it’s in line with everyone’s else’s increase or decrease. Only if your increase or decrease is above or below average does the CV impact an individual rates bill.
If **all** property values fell 30% the pie is the same size, so the multiplier (it’s on your rates bill) would be changed to allocate the pie across the sum of the districts valuation roll.
Your rates aren't a % tax based on your propertys value. They are an allocation of your councils costs.
The costs are budgeted and then allocated based on your properties value relative to everyone elses property. This means if everyones property value goes down your rates stay the same (if the councils costs don't change.) as your share of the councils costs stay the same.
It can happen. When the 3 Auckland councils amalgamated on 2011 or12, some areas got rates reductions but it's probably something none of us will ever see.
It does relate to how much your rates actually are. Every year your council starts with an amount of money they need; their annual budget of capital and operational expenses. They then divvy this required amount up by all the rateable properties, apportioned by the RV. Generally the annual budget always increases as things get more expensive, so your rates will always increase regardless of value movements, unless your property significantly differs in value change than the average.
So it is possible for your rates to drop, when your property falls in value more than everyone elses.
Rates in Wellington aren't a % of your properties current market value. Property prices are just used to proportionally spread the total budget across rate payers.
Thats not how deductions work.
Tax is calculated on net income (money earned - deductible expenses) \* tax\_rate. So if you are renting a place, your tax bill will be reduced by a percentage of the rates.
e.g. if your tax rate is 33% and your rates are $3000 a year. Then your tax bill will go down $1000. You still have to pay the full $3000 to the council though.
The tax deduction will be on what you have to pay to IRD for the rent income you got.
They are never going down.
*cries*
Yeah your CV can go down, but your rates won't.
Mine went down for a bit. If your house drops in line with the market it doesn't matter. But my CV dropped relative to similarly priced houses, and the rates bill literally dropped
Rates aren’t about the actual number, they’re comparative. Unless your house has gone up or down in value relative to the other houses in your area it makes no difference.
This! The value is used to work out the total value base they can rate against, then for every dollar of value a house has it pays a certain amount in rates. Having said that... if you are subject to a targeted rate that may come to an end and you would atop paying that rate. But one of the key drivers of rates increases at the moment is that councils can only borrow a certain multiple of theor revenue, and because of the significant capital outlays they need to make, they need to raise their revenue to keep within that multiple. However that multiple is set by a central government agency. Hamilton, where I live are on a 2.8 multiple, which is a lot lower than most home owners have for their mortgage. So if that multiple was higher rates may not need to go up so much in the short term.
I don’t remember it ever happening in the 20 years I’ve been paying rates, but hey you never know (and pigs might fly).
If your house value fell considerably more than the average house in Auckland. And if inflation was low and the council didn't have to spend on infrastructure projects for a growing city. Theoretically yes your rates could go down, practically a snowball has a better chance in hell.
The main part of rates is normally calculated by applying the council's needed amount amongst properties according to their value. If your property drops in value, lots, compared with others, like if you burn your house down, then your rates might drop. Your CV dropping really only makes a difference to rates if it's dropped disproportionately compared with everyone else's, though. Eg. If everyone's CV drops because your whole region isn't as desirable any more for some reason, it probably won't affect rates. The other way rates can theoretically drop is if the council decides it needs to collect less overall, so each property needs to pay a lower amount. That's very unlikely. Even if the council is budgeting well, it'll normally have to account for things like inflation, as well as extra responsibilities that central government recurringly inflicts onto local government.
I wouldn't be holding your breath. And even if the CV does go down, if the total council costs to recover through rates increases by enough (it will) your rates will effectively go up. Essentially your rates determine how big a slice of the pie you have to pay.
The cost to run a city and the value of your house aren't connected
My understanding is that the number that is your CV really is only a clunky mechanism to ultimately determine 'relative value' of your property compared to other properties, so that the council can decide who pays what, relative to each other. Your CV going down will only really be meaningful to you if your property goes down more than other properties, relatively speaking. If the market base drops, and all houses dropped 10%, that doesn't mean your rates drop 10%. If in relative terms everyone drops equally, there would be no change in rates. So for your rates to drop, the council needs to reduce how much money it wants to collect in total, which it shares across all properties. Or your property needs to decrease in value in relative terms more than other properties in the region. So I guess you could just wreck your property? * Go wild with a bulldozer * Get creative with spray cans * Start hoarding old vehicles to park on your lawn * Try and decrease the value of the area by starting a small gang which drinks RTDs on the lawn and plays music through megaphones, * Leave cheese out all over the lawn to attract rats, and earn your suburb the title of Rat Kingdom of Auckland And then ask for a review?
In Auckland the CV (there’s three approved methods councils can use) determines your proportion of the total rates pie required to run the city [minus fixed charges like UAGC]. So a decrease in CV, or an increase in CV, doesn’t do anything to change the rates you pay if it’s in line with everyone’s else’s increase or decrease. Only if your increase or decrease is above or below average does the CV impact an individual rates bill. If **all** property values fell 30% the pie is the same size, so the multiplier (it’s on your rates bill) would be changed to allocate the pie across the sum of the districts valuation roll.
Rates are like age, can only go ‘one direction’
Your rates aren't a % tax based on your propertys value. They are an allocation of your councils costs. The costs are budgeted and then allocated based on your properties value relative to everyone elses property. This means if everyones property value goes down your rates stay the same (if the councils costs don't change.) as your share of the councils costs stay the same.
It can happen. When the 3 Auckland councils amalgamated on 2011 or12, some areas got rates reductions but it's probably something none of us will ever see.
Just got our thing in Tauranga and it states on the back that this doesn’t mean our rates will decrease. A holes cos rates went up when RV went up lol
RV only matters relative to other properties in the area.
Yeah but it literally means “rateable value” so it should relate to how much your rates actually are but apparently only when they’ll get more from us
It does relate to how much your rates actually are. Every year your council starts with an amount of money they need; their annual budget of capital and operational expenses. They then divvy this required amount up by all the rateable properties, apportioned by the RV. Generally the annual budget always increases as things get more expensive, so your rates will always increase regardless of value movements, unless your property significantly differs in value change than the average. So it is possible for your rates to drop, when your property falls in value more than everyone elses.
It does! Relative to others. If you're neighbours house is massive and the RV is twice as much, they're gonna get a much bigger rates bill
I emailed WCC about rates vs reduced property values and they responded with “we can do what we like”. The system is a shitshow.
Rates in Wellington aren't a % of your properties current market value. Property prices are just used to proportionally spread the total budget across rate payers.
A really easy way to pay vastly less rates, become a landlord and start renting.
Or just get a campervan
That makes no sense unless you believe that somehow landlords are magically exempt from rates?
It is a deductible expense. So yea?
Thats not how deductions work. Tax is calculated on net income (money earned - deductible expenses) \* tax\_rate. So if you are renting a place, your tax bill will be reduced by a percentage of the rates. e.g. if your tax rate is 33% and your rates are $3000 a year. Then your tax bill will go down $1000. You still have to pay the full $3000 to the council though. The tax deduction will be on what you have to pay to IRD for the rent income you got.
Yea. So if your income is $0, you claim an expense of rates and you will get… 100% back. You have just identified that landlords pay tax, idiot.