A man I know is celebrating the fact his house has been re-valued down to the tune of $95,000.
That may not seem to you like an event to make anyone celebrate, and more curiously in this case, the owner himself sought the reduction in valuation.
In the case of the Auckland man- Gary Osborne- his west Auckland home had been valued in the latest round of council valuations late last year as being worth an eye-watering $895,000, roughly 10 times the median household income.
That was a rise of 95 per cent on the council’s 2014 ratings valuation, and a rise that was higher than his immediate neighbours.
As was his right, Osborne asked for a free review of the valuation, and presented evidence that it should be lowered.
And QV, which did the ratings valuations, agreed after a visit to the property that it had been wrong.
The corrected valuation of
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$800,000 was logged onto the system, made up of land value of $775,000, while the ‘‘value of improvements’’ (ie the house) was valued at a mere $25,000.
In a rapidly-filling city like Auckland, it is land prices that have risen.
Exactly why Osborne sought the revaluation is a story in itself.
A former real estate agent, and a retired man, he was keen on only paying his fair share of the rates.
Rates are divvied up in relation to the value of people’s properties.
The higher the value of your property, the bigger the share of the city’s rates you pay.
That’s not something that usually bothers Aucklanders.
The game has been to get as much house as possible, and glory over the annually rising valuations.
If anything, the periodic ratings valuations are a time to celebration, not commiseration, though rising rates are a burden that falls especially hard on retired people.
The annual hike in the rates bill, massive though it has been in recent years, has been tiny compared to the extra hundreds of thousands added to homeowners’ net wealth as a result of the wildly appreciated prices of their homes.
Everybody’s got a view on whether those now-dipping prices are sustainable in the long term, and exactly what the government’s KiwiBuild, foreign buyer, and general economic policies will do to the market.
But Osborne has no plans on selling, so he’s happy with the cut in his valuation and rates’ bill, and anyway, the council valuation is only temporary.
The next council valuation is in a couple of years’ time.
Osborne also learnt a lot about the valuation system a few years’ ago, when the council took some of his land for road widening, which was not taken into account when the council valuations were done leaving him with little trust in the valuation system.
It lowered his trust in what is at best an imprecise art.
How much is it worth off his rates?
Maybe $200-$300 a year, he estimates.
How much are honest folk worth to show us the nature of the systems that impact our money lives?
Priceless, I reckon.
Property valuations are not an exact science.