Rates reduction to save CBD

Businesses in Nelson are paying rates up to 238 per cent higher than residential properties, making up a quarter of the council’s rates-takings.

The council’s plans to develop the CBD means those percentages will be reduced, with the difference being made up by increased residential rates.

Tasman residential rates are higher than residential Nelson rates, but Nelson ratepayers have a benefit their Tasman neighbours don’t: differential rates for commercial properties.

TDC rates are based on the capital value of rateable properties, so business-owners are paying rates based on the same calculation as residents. Nelson City Council (NCC) rates are based on land values with differentials, which take into account not only land values, but also the type of property and the location.

Rural properties pay a discounted rate compared to residential properties, and businesses pay an increased rate, with increases depending on location. CBD businesses are charged higher rates than businesses located in other places, like near the airport.

NCC’s corporate services group manager Nikki Harrison said the differential system was commonly used by councils.

‘‘The reason we use it is to reflect higher services that commercial ratepayers get, including pavements, rubbish collection, inner-city carparking is provided for them ... it’s justified on the basis of the money that we put into the economic development agency, it’s direct and indirect benefits that they get,’’ she said.

‘‘They pay above a residential ratepayer for a similarly valued property, and there’s also the fact that we we use land-value, and generally commercial properties have higher capital value and because we use land value we don’t really pick that up.’’

Harrison said 25 per cent of the council’s general rates came from commercial ratepayers, but in a bid to make the CBD a more attractive location for business owners the council was looking to ‘‘reduce that burden’’ on commercial properties.

The rates for businesses will be decreasing by half a per cent each year for the first five years of the LTP. With this reduction, assuming all other factors remained the same, Harrison said the differential to businesses would reduce from 238 per cent down to 183 per cent at the end of the reduction period.

Business owner Craig Taylor,

It’s minuscule, really ... it’s certainly not going to be a game-breaker. Craig Taylor, business owner

of Taylor’s shoes, has one shop in Nelson CBD and one in Richmond, so he has experience with both rating systems.

He said the rates for his Tasman District shop were significantly lower than the rates for his shop in the CBD, despite the Richmond location being twice the size of the Nelson branch.

‘‘We’re basically paying double [in Nelson],’’ he said.

Taylor said the reduction was helpful, as ‘‘every little bit counts’’, but overall it wasn’t likely to make a real dent for most businesses in or considering opening in the Nelson CBD.

‘‘It’s minuscule, really ... it’s certainly not going to be a gamebreaker in terms of business attitudes or business success.’’

He said more needed to be done to attract more businesses and people to the CBD.