Revenue and Financing Policy Consultation

During the consultation process for the Long Term Plan (LTP) 2024–2027 community feedback suggested Council reviews how it set rates. In particular, the key feedback was to look at calculating general rates on capital value (CV) instead of using the existing land value (LV) method. As part of its deliberations process Council agreed to undertake a review of the Revenue and Financing Policy.

Council is legally required to consult before adopting a policy or making any amendments to the policy under section 102(4) of the Local Government Act 2002.

There are some key areas we are seeking your feedback on:

• Moving from land value to capital value for the general rate
• Changing the differential for Commercial/Industrial properties to 1.1
• Equalising the capital costs of stormwater across the district

No. This policy review isn’t about changing the total rates amount Council receives. The total amount of rates Council collects each year is set through the Long Term Plan process and updated where needed through the Annual Plan each year. This policy sets out how the rates are paid for across the district. Through the Annual Plan 2025/2026 process we will look at the budgets and the levels of rates when the policy is applied.

General rates pay for services where Council considers the benefits and costs are to the whole district. General rates are charged across the district through a mix of a fixed charge, called the Uniform Annual General Charge (UAGC), and a charge called the General Rate. 

Targeted rates pay for services where Council considers the benefits and costs are to groups of ratepayers. Targeted rates are charged to those groups of ratepayers through a mix of fixed charges, and/or value-based or area charges.  

Rate differentials apply to the general rate and are used to change the proportion of rates that we collect from each group of ratepayers. This means they are categorised into different classes, depending on how much benefit the property is likely to received. Ratepayers will pay rates of a higher or lower amount depending on their land use.

Currently there are two differential categories for rates:

Residential and small sized lifestyle properties
All land that is used exclusively, or almost exclusively, for residential purposes including investment flats, or used for lifestyle purposes and is less than two hectares. The differential for residential and small life sized properties is 1.

Other
All land that is not included in the definition of residential and small lifestyle properties. Other includes land used exclusively, or almost exclusively, for dairy, horticultural, forestry, pastoral and specialist purposes, commercial, industrial or mining purposes and as a utility asset. Commercial includes resthomes and short stay accommodation such as motels and hotels. The current differential for Other (not residential and small sized lifestyle properties) is 1.55.

With the proposed move to using CV for the general rate, there is a significant increase for commercial and industrial properties as they have a larger ratio of CV to LV based on the improvements on the land. We are proposing to reduce the differential for commercial/industrial to 1.1 as this is considered sufficient to reflect the benefits of the general rate to commercial/industrial properties, as opposed to other property types.

Land Value (LV) is the value of your land.  Capital Value (CV) is the land value plus improvements made to the land, such as buildings.

General rates pay for work that can benefit the whole district, and all ratepayers contribute to these services. In some cases a service is partly paid by general rates and part paid by targeted rates.

Some activities and services that are in part or fully funded by general rates include:

• Roading, footpaths and bridges
• Solid Waste (landfill, public rubbish bins, graffiti)
• Stormwater (part-funded by general rates)
• Wastewater (part-funded by general rates)
• Regulatory functions (such as resource consents, monitoring, animal control, environmental health, all part-funded through general rates)
• District Leadership, Finance and Internal Services

Uniform Annual General Charge

The Uniform Annual General Charge (UAGC) is part of the general rate and is a fixed amount charged to all rating units. We are not proposing to change the way we apply the UAGC and will continue to set it annually as a levelling tool to achieve a percentage of uniform rates of between 27% and 30% of total rates.

A rating valuation is a three-yearly independent assessment of a property's value and is determined by house sale prices on a specific date. This means that the rating valuation is reached using the same process and reflects the same market trends as every other property in your area. We use these valuations as a guide for setting your rates.  

The last revaluation was dated 1 September 2023 and these values will be used by Council to set your rates for the next three rating years. 

No. A change from LV to CV will only impact the general rate part of your rates invoice. For those properties paying the stormwater targeted rate it will redistribute who pays what portion of the stormwater budget.

You can find our current remission policy here.

Following this consultation, if Council decides to switch to capital value, it may consider whether it needs to provide rates remissions to address some impacts of the change during the preparation of the Annual Plan 2025/2026. This will be if there are unintended or extreme impacts that are not consistent with the main principles Council has considered as part of the review.

The general rate is based on how properties are used and not the zone or category of your property. If your property is used for residential it will be rated as residential.

The value of improvements for properties that have been newly built on or renovated will be added by QV and sent through to Council , generally this happens when the house can be lived in. The improvements value will reflect what the property would have been worth if it existed at the effective date of the last revaluation (1 September 2023) this keeps all property values comparable.

The proposed rates changes we have modelled for consultation are based on the budgets for the current rating year 1 July 2024 to 30 June 2025. Using these figures means you can compare how the changes will impact your property (compared to the rates you pay for this year).

The outcomes of this policy review will take effect from 1 July 2025. Examples given have been based on rates for the 2024/2025 year and current property values. Examples cannot be taken as indications of rates charges for the 2025/2026 year and onwards. The budgets for the next rating year starting 1 July 2025 are currently being reviewed over the next few months as part of our Annual Plan 2025/2026 process.

You can email haveyoursay@kaipara.govt.nz and someone will get back to you. Alternatively, head along to one of our face-to-face events and ask staff or elected members directly.

• Wednesday 6 November - Dargaville Community Development Board Business Mix and Mingle (staff will also present an update ahead of the consultation period to Mangawhai Business Association in late October)
• Saturday 30 November - Mangawhai Community Market (Mangawhai Beach School)
• Saturday 07 December 10.00am-2.00pm - Dargaville Christmas market