Painful rates hikes ‘just wrong’

Some Nelson residents say their whopping rates increases are unfair, and the mayor agrees.

The jumps – some more than 30% – are thanks to 2021 Quotable Value (QV) land revaluations, which have significantly increased land values throughout the city.

The average increase in land valuation in Nelson was 73%, but some have seen increases of more than 100%, and those increases, along with some other calculations involved in rates, have led to eye-watering increases in this year’s rates bill.

Though the rises were steep for some, the Nelson City Council would not be taking in more than the average 5.4% increase, due to the way rates are calculated. However, because it is calculated based on land QV valuations, the areas with the steepest rates increases were those which had seen the highest jump in land value.

There are about 20,000 residential ratepayers in Nelson, with about 52% facing an increase higher than the 5.4% average set by the Council, and 48% with a lower increase than that average. Of that 48%, about 10.5% (roughly 5% of the total) will have a reduction in their rates.

On July 20 the council sent letters to all ratepayers in for an increase of 15% or more to their rates thanks to the revaluation, with rates notices going out on July 25 with four weeks to make the first payment.

Residents Astrid and Allan Sims, found their rates had jumped an extra 30.35%, working out about an extra $22 per week in rates for their Princes Dr home.

‘‘We’ve had properties in five different rating zones ... and never had rates increases in the double digits, let along 30%. Never.’’

He said the councillors had signed off on ‘‘this hideous thing’’ that would end up driving people out of their homes.

‘‘We saw that happen with friends of ours in Tasman ... our rates will be near enough to $100 per week, and I’m not getting anything extra for it,’’ he said.

He said the land valuations were a ‘‘snapshot’’ taken at a time when the market was ‘‘frankly ridiculous’’. ‘‘You could have sold a caravan for a million dollars.’’

However, when he received his own valuation, since he had no intention to sell, he regarded it as simple market fluctuation and didn’t take much notice.

‘‘We never contest it, because what’s the point? You can’t fight city hall.’’

He said previous rating values for the property were $355,000 for the house and $195,000 for the land, with a capital value of $550,000.

The new figures were $235,000 for the house, $590,000 for the land, with a capital value of $825,000.

He said the increases people were facing were ‘‘just wrong’’.

Sallie Rose owns a ‘‘tiny’’ half section up The Brook, and said her rates had gone up by 21.5%. Her neighbour owns the larger part of the section and their rates had gone up by about 16%.

‘‘I don’t get any extra money with the value increase – I wish it hadn’t gone up, it makes no difference to me ... I just have to find another $500 per year to pay the council.

‘‘Where do you find that money?’’

She said on her fixed income she was already going without – she never went out to dinner or bought takeaways, she only used her car one day a week and was ‘‘trying to shop really carefully’’.

Nelson mayor Rachel Reese said she was ‘‘very conscious’’ of the challenges people faced under the QV revaluations.

‘‘The council rate increase was set at under the current rate of

inflation, but the distribution is fickle as a result of the revaluation system that is determined by Quotable Value,’’ she said.

‘‘The revaluation and rating interface is a highly imperfect system and is an example of why local government need new funding tools that make better sense for communities.’’

Reese said new funding ideas were part of a ‘‘live discussion’’ and part of the Future for Local Government review that was under way. She criticised the fairness of the system using ‘‘market economics as a major input’’ for calculating rates.

‘‘It’s a really frustrating system for us [elected members], because we have no control over it. We don’t have [QV values] finalised at the point that it’s confirmed when we’re setting the rates. A really hot property market can create these anomalies.’’

Council chief executive Pat Dougherty said the average rates increase of 5.4% was still in effect, but the revaluations had changed the distribution.

‘‘We are aware that, for households facing a higher-than-average increase due to revaluation, this will come as a shock,’’ he said.

‘‘We made the decision to write to these households to explain that national trends have led to large changes in land values, and that while this does not increase council’s overall income, it does reallocate the proportion paid by each ratepayer.’’

He said the letter included financial assistance options available to those who might find the new bill a struggle, ‘‘especially at this time of high inflation’’.

‘‘Council’s Rating Policy will be considered as part of the next Long Term Plan, but every rating policy has its own advantages and disadvantages.’’