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Last reviewed: Mon, 14 Jul 2014

Property Revaluation 2013



Christchurch City Council released the results of its first post-earthquake property revaluation in March 2014.



You can check your new revaluation here

The revaluation - the first in six years - shows that residential properties rose by an average of 16.2 per cent between August 2007 and November 2013, compared with an approximate 9 per cent rise for commercial and rural properties. However, there was a very wide range of valuation movement across the District, reflecting both earthquake impacts and broader property market movements during the global financial crisis. Valuations for individual properties may therefore have moved significantly more or less than these average figures.

Because of the impact of the earthquakes a special methodology was used for this valuation, and it excludes the impact of earthquake damage.

Ratepayers had until 28 April 2014 to lodge their objections which are being handled by independent valuer Quotable Value (QV). For further information about the objections process visit the QV website www.ratingvalues.co.nz, or call 0800 787 284 .

The objections deadline was extended until 5 pm 12 May 2014 for owners of Red Zone properties. More information and FAQs.

Revaluation notices

You can check your revaluation on the Council website, but a copy of the revaluation notice has also been posted to you.

Can you explain the information on my Rating Valuation Notice?
Valuation notices show:

  • Capital Value, often referred to as the Rating Value (what your property would have sold for on 1 November 2013)
  • Land value (what your section would be worth if it was vacant on that date)
  • The value of Improvements is simply the difference between the Capital Value and Land Value (ie. it is not an estimate of the actual cost of construction for these improvements).

The term “improvements” refers to any buildings - such a house, garage, or shed - and landscaping on the property. It does not cover renovations unless you have done work (e.g. an extension) that required a building consent. Valuation notices have been posted to property owners, and the new values will apply to rates from 1 July 2014.

Who does the revaluation and why?

Who decides the revaluation method?
The Government approved the revaluation method recommended by Land Information New Zealand (LINZ) , the government agency responsible for setting and monitoring rating valuation standards.

What is Council’s role in the revaluation?
The council is legally obliged to ensure a revaluation of properties is done every three years. The last valuation due in late 2010 was postponed following the September 2010 and February 2011 earthquakes. Council contracted an independent valuer, Quotable Value (QV), to undertake a valuation of all city properties. The Council then uses those valuations as the basis for setting rates.

When will the revaluations apply to rates?
The 2013 revaluation will apply to rates from 1 July 2014.

What is QV’s role?
Quotable Value (QV) has been contracted by the Council to conduct the revaluation and works closely with LINZ regarding methodology and revaluation results. QV will also handle objections from ratepayers who dispute their valuations.

If there is another earthquake, will the Government use the Rating Value as the basis for a pay out if my house is Red Zoned?
We are unable to advise what the Government will choose to do in the future should another major earthquake occur.

How the revaluation was done

How was the revaluation arrived at?
Revaluations are based on ac tual property sales on or just prior to 1 November 2013 for comparable properties in your area. This is standard practice throughout the country.

Does the valuation take into account the earthquake damage to my property?
No. Valuations do not take into account physical earthquake damage on individual properties, but they do reflect market reaction to it. If prices for comparable properties in your area have risen or fallen, your value reflects this. The new valuations simply maintain the previous practice of ignoring earthquake damage on individual properties (except where buildings were demolished).

Why was this method of valuation chosen?
LINZ and Government decided it was the most practical method available because it was not possible to physically inspect all 165,000 properties in the city in the time available. This revaluation method also reflects the previous situation where rates for the 2013/14 and previous years were based on 2007 property valuations which did not take into account earthquake damage unless buildings were demolished.

Why not deduct outstanding insurance payments from the property valuation?
Insurance companies and EQC could not provide details of damage and insurance entitlements for each property to QV. This information is highly confidential and subject to strict privacy measures.

Has QV visited my property to assess its capital value?
It is standard practice to base valuations on actual property sales for comparable properties in your area. QV inspected some residential properties, particularly recent sales and where building consents indicated that work had recently been completed. Because of the rapid change in commercial and industrial areas, QV inspected virtually all commercial properties.

What other information does QV use to arrive at a valuation for my property?
QV has plans and data on each property in the city. It also uses information from sources such as web sites, Council records, and CERA. In the case of commercial, industrial and rental properties QV will take into account rental returns.

I want to sell my home, but I have been told that repairs will not be done until 2015/16. When I put my house on the market, having a valuation that assumes it has been repaired will make it look overpriced. This is not fair.
The Council is sympathetic to homeowners facing this situation but has no control over the pace at which houses are repaired.  LINZ, the Council and the Government agreed that it was not possible to defer the revaluation until all repairs were completed.

Impact on my rates bill

(See table below for examples of changes in rates bills)

Does a rise in property values mean the Council will automatically collect more in rates?
No. The total amount of rates collected each year is set in the Council’s Annual Plan. Rateable values are only used to allocate this total amount between individual properties.

Is there a direct correlation between an increase or decrease in valuation for my property and my rates bill?
Not directly. If the capital or rating value of your property rises or falls by a certain percentage, this does not mean your rates will automatically rise or fall by the same percentage. Council's total rates requirement is set through the annual budgeting process, and Rating Values are only used to allocate this total amount between individual properties. Whether your rates bill goes up by more or less than the average amount will therefore depend on whether your valuation has gone up by more or less than the city-wide average.

If your property value has gone up by less than the city-wide average since 2007, then your rates should go up by less than the city-wide average, and may even fall. If your property value has gone up by more than the city-wide average since 2007, then your rates will probably go up by more than the city-wide average.

Rates bills also include fixed charges spread evenly across all city properties.

Am I eligible for a rates rebate if I cannot afford to pay my rates increase?
Rates Rebate is a government scheme designed to provide rates assistance for low income households. Eligibility and the amount of the rebate are based on total household income (spouse included) and the amount of rates paid. An application form is available at a Council Service Centre or Library. Alternatively, call us on 941–8999 and we can post one out to you.
Please note that the rebate can be applied for at any time during the rating year you are applying for, but the rebate can not be back-dated to previous rating years.

How much will my rates bill change as a result of the revaluation?
This table gives examples of actual value changes in residential properties as a result of the 2013 Rating Valuation. It shows the impact on annual and weekly rates bills of the Council decision to increase rates by 7.48% (on average to existing ratepayers) in the Annual Plan 2014/15.

Rating Values Rates Rates Change 
2013 RV2007 RVRV changeactual 2013/14AP 2014/15%$ (annual)$ (week)
250,000 240,000 +4.2%1,293 1,278 -1.2%-15.37-0.30
250,000 217,000 +15.2%1,197 1,278 +6.8%+80.85+1.55
250,000 190,000 +31.6%1,084 1,278 +17.9%+193.82+3.73
300,000 292,000 +2.7%1,511 1,475 -2.4%-35.90-0.69
300,000 253,000 +18.6%1,348 1,475 +9.4%+127.25+2.45
300,000 217,000 +38.2%1,197 1,475 +23.2%+277.85+5.34
350,000 350,000 +0.0%1,753 1,672 -4.7%-81.56-1.57
350,000 300,000 +16.7%2,632 1,672 -36.5%-960.10-18.46
350,000 253,000 +38.3%1,348 1,672 +24.1%+324.24+6.24
400,000 392,000 +2.0%1,929 1,869 -3.1%-60.27-1.16
400,000 334,000 +19.8%1,686 1,869 +10.8%+182.37+3.51
400,000 289,000 +38.4%1,498 1,869 +24.7%+370.64+7.13
450,000 445,000 +1.1%2,151 2,066 -4.0%-85.01-1.63
450,000 393,000 +14.5%1,933 2,066 +6.9%+132.54+2.55
450,000 346,000 +30.1%1,737 2,066 +19.0%+329.16+6.33
500,000 480,000 +4.2%2,297 2,263 -1.5%-34.43-0.66
500,000 422,000 +18.5%2,055 2,263 +10.1%+208.22+4.00
500,000 389,000 +28.5%1,916 2,263 +18.1%+346.27+6.66
550,000 522,000 +5.4%2,473 2,460 -0.5%-13.15-0.25
550,000 470,000 +17.0%2,255 2,460 +9.1%+204.41+3.93
550,000 439,000 +25.3%2,126 2,460 +15.7%+334.07+6.42
600,000 600,000 +0.0%2,799 2,657 -5.1%-142.47-2.74
600,000 510,000 +17.6%2,423 2,657 +9.7%+234.05+4.50
600,000 439,000 +36.7%2,126 2,657 +25.0%+531.06+10.21
650,000 630,000 +3.2%2,925 2,854 -2.4%-70.97-1.36
650,000 567,000 +14.6%2,661 2,854 +7.2%+192.59+3.70
650,000 510,000 +27.5%2,423 2,854 +17.8%+431.05+8.29
700,000 712,000 -1.7%3,268 3,051 -6.6%-217.04-4.17
700,000 605,000 +15.7%2,820 3,051 +8.2%+230.60+4.43
700,000 548,000 +27.7%2,582 3,051 +18.2%+469.05+9.02
800,000 762,000 +5.0%3,477 3,445 -0.9%-32.23-0.62
800,000 702,000 +14.0%3,226 3,445 +6.8%+218.79+4.21
800,000 650,000 +23.1%3,008 3,445 +14.5%+436.32+8.39
900,000 872,000 +3.2%3,937 3,839 -2.5%-98.41-1.89
900,000 793,000 +13.5%3,607 3,839 +6.4%+232.08+4.46
900,000 725,000 +24.1%3,322 3,839 +15.5%+516.56+9.93
1,000,000 942,000 +6.2%4,230 4,233 +0.1%+2.72+0.05
1,000,000 885,000 +13.0%3,991 4,233 +6.0%+241.19+4.64
1,000,000 800,000 +25.0%3,636 4,233 +16.4%+596.79+11.48

This table gives examples of actual value changes in residential properties as a result of the 2013 Rating Valuation. It shows the impact on annual and weekly rates bills of the Council decision to increase rates by 7.48% (on average to existing ratepayers) in the Annual Plan 2014/15.

Objecting to my revaluation

Can I object to the valuation?
Objections to the 2013 General revaluation closed on 28 April (12 May for red zone properties). Quotable Value, the independent contractor that carried out valuations on behalf of the Council, is managing all objections. For further information visit the QV website www.ratingvalues.co.nz, or call 0800 787 284 . If you disagree with QV’s decision, you have 20 working days from the date you receive the decision to lodge an application with the Land Valuation Tribunal. There is a $50 filing fee and if your application proceeds to a hearing District Court fees may be payable.

More information is available on the Ministry of Justice website. Note: earthquake damage is not a ground for objection.

If I object, will QV carry out an on-site inspection?
QV may carry out an on-site inspection if major improvements to your home have been carried out, e.g. if you have installed a new kitchen, or other improvements which were not visible from the exterior.

What happens if my valuation changes as a result of my objection?
Where the objection results in a change to your capital value, your rates will be updated accordingly and backdated to 1 July 2014

How long do I have to wait to find out the result of my objection?
Objections will be assessed as soon as practicable. Around half are expected to be completed prior to first instalment rates invoices being sent in July 2014, with all others completed prior to second instalment invoices being posted.  Please continue to pay your rates as billed – any change as a result of your revaluation objection will be back-dated to 1 July 2014 and adjusted for in your second instalment invoice.

Insurance implications

I bought a property cheaply because payment of the insurance claim was deducted from the purchase price. Will the valuation take this into account?
No, the effect of earthquake damage is not taken into account on individual properties. The method used for revaluations assumes damaged properties will be returned to their pre-quake state when repairs are completed.

I did not have insurance at the time of the earthquakes and cannot afford to repair my house. Will the valuation take this into account?
No. The methodology adopted by the Government for the 2013 Christchurch valuation excludes the effect of earthquake damage on individual properties.

Should I use Rateable Value as a basis for insuring my property?
No. The Rateable Value is the likely price your property would have sold for on 1 November 2013. For insurance purposes the replacement value of your home is the actual cost of rebuilding. An estimate of replacement value usually  includes demolition and consent costs associated with rebuilding. Such costs are not included in a Rating Valuation.

Impact where homes are uninhabitable or have been demolished

My house is uninhabitable. What impact will this have on my valuation?
The methodology adopted by the Government for the 2013 Christchurch valuation excludes the effect of earthquake damage on individual properties. However the current rates remission applied to uninhabitable houses will continue.

What if my house is uninhabitable?
While the house is standing, the valuation will include the value of the house, but you will be eligible for the rates remission available for uninhabitable houses. Your Rating Valuation notice will still show a Capital Value for the property as well as a Land Value, but your rates invoice will show a remission so that you are only charged rates based on Land Value until the house is repaired or rebuilt.

How will the revaluation affect my rates if my house has been demolished and not yet rebuilt?
Rates will be based on land value only until the house has been rebuilt. 

The Council is not automatically notified of house demolitions unless the height of the building means a resource consent is required. Therefore, when your house is demolished, you need to let the Council know. It will then pass this information on to Quotable Value so your valuation is changed accordingly. Once a house is demolished your rates will be based on land value only until the house is rebuilt. Please note that it can take up to six weeks between Council becoming aware of a demolition and adjusted values being formally recorded in the rating database.

My house has been demolished and rebuilt. Does this mean I can expect a big jump in valuation?
The revaluation will reflect actual market sales for a comparable house in your area.

Impact on Red Zone and Central City business area

How were Red Zoned properties valued?
Due to the impact of the earthquakes, Red Zoned properties have been treated as unsuitable for residential occupation. The land value was initially assessed with regard to rural land sales evidence. A premium was then applied taking into account the city location and the possibility that at some time in the future the land may be suitable for residential occupation with remediation work undertaken.

The Rating or Capital Value also took into account the short term rental potential of the property. This is a common methodology when no market sales evidence is available. In most cases, this has resulted in the property being valued at around $30,000 to $40,000.

How have values in the Central City changed?
Central City land values have dropped by up to 50 per cent in the previously high pedestrian areas, such as City Mall and Colombo Street. However they have risen by up to 50 per cent in the Victoria Street area. Office buildings are also showing an increase in value due to the increased rents resulting from the loss of office space in the earthquakes. Office rentals are now approaching $400 per square metre which is up to 30 per cent higher than pre-quake levels.

Vacant sections and unit titles

I own a vacant section that suffered earthquake damage. Does the valuation  take this into account?
The revaluation excludes the effect of earthquake damage on individual properties. However it will reflect general market sentiment and movements in value may be affected by the technical category of the land concerned (e.g. TC2 and TC3).

How do the new values affect properties with unit titles?
Some properties with unit titles where buildings have been demolished may show a significant drop in land value.

Where the building is demolished and is unlikely to be rebuilt to its former configuration, then each unit is treated as just owning a share of the actual land that the whole building stood on.
For example. Where a multi-story block of 10 apartments on a 250 square metre section is split into 10 unit titles, each of the 10 apartments is treated as a separate piece of “land.” This means that for valuation purposes the total land area for the whole building is 2,500 square metres (ie. ten apartments of 250 square metres each). Once the building is demolished, each of the 10 apartments is deemed to occupy just 25 square metres - one-tenth of the actual ground area - and is valued accordingly.

Impact of natural hazards

How will the Port Hills slope stability classification affect property values?
The 2013 Rating Values take into account the market reaction to earthquake damage and some allowances have been made for areas classed as highest risk.

Have flooding problems in residential areas been taken into account in the revaluation?
The 2013 Rating Values take into account known flood-prone areas. These issues are also reflected in recent market sales so do have an  impact on values. The District Plan Review currently underway will contain more extensive updated  information on flood management areas, but as it had not been released at the time of the revaluation, it was not part of this assessment. Note: flood management areas incorporate areas that might be affected by a one in 200 year flood event.

Residential Red Zone Port Hills

Does the RV notification date (12 March 2014) reflect the state of my property on that date?
No. The Rating Value is the probable price the property would have sold for on 1 November 2013. The 2013 values were made public on 12 March 2014. Because of the valuation method used, the effect of earthquake damage on individual properties is excluded.
 
Did the Valuer General know the RRZ Port Hill review decisions before property owners?
No. The Valuer-General did not know the RRZ review decisions before property owners.

Was mitigation (rock-fall barriers and bunds) included in the latest RV? 
Where QV was aware of mitigation that changed the status of the land, this was taken into account when determining values. If you are concerned that mitigation may not have been accounted for, you can lodge an objection to your Rating Value. If future mitigation work alters the status of the land, Rating Values may be amended accordingly

If I build rock fall barriers or bunds to protect my property will this change my RV?
If future mitigation work alters the status of the land, Rating Values may be amended accordingly.

Do we still pay rates on vacant sections in the Port Hills residential red zone?
Council does not charge rates (a 100% rates remission) on residential red zoned properties where the Crown has not yet made a decision about the future of the land. This remission is only available for residential land that was either vacant or where construction was underway on 22 February 2011

I am currently receiving rates remission for a Port Hills property. Will I continue to get rates remission once the Crown's offer to buy my residential red zoned property expires?
It depends on your circumstances.

  • If the house is unable to be occupied, then rates will continue to be charged based on land value only irrespective of whether the property is red or green zoned, or whether the Crown has made a purchase offer. 
  • If the house is the subject of a section 124 Notice under the Building Act, then no rates are payable until the notice is lifted (again, irrespective of whether the property is red or green zoned, or whether the Crown has made a purchase offer).
  • If a red zoned section was vacant or under construction at 11 February 2011, then no rates are charged (i.e. 100% remission), but this remission will cease once the Crown makes a decision on the future of the land (including a decision to make a purchase offer).

Can we be refunded if our property was green and has changed to red?  If so, will this refund be back-dated to the original zoning date?
No. The above vacant red zone land remission only applies from the date that it was red-zoned. 

If I rebuild, what happens to my RV?
The rating value will be reassessed based on the changes made to the property.

 

Authorising Unit: Corporate Finance

Last reviewed: Monday, 14 July 2014

Next review: Tuesday, 14 July 2015

Keywords: rates, revaluation, revaluation of my property, revaluations, valuation, valuation change, valuations