Rating ruling takes shine off SunGold
HORTICULTURE: Kiwifruit licence value included in rates legitimate, says High Court
Increasing industry costs can make the kiwifruit industry a less attractive investment and reduce growers’ spending in local communities.
The group that represents New Zealand’s kiwifruit growers says it’s disappointed in the recent High Court decision appeal ruling that SunGold kiwifruit licences can be included in the rateable value of a property.
The Bushmere Trust, a kiwifruit grower, took the Gisborne District Council to the Land Valuation Tribunal last year after the council changed its ratings to include the value of the licences in the property’s capital value.
That took the nearly six-hectare property’s rateable value from $2.8 to $4.1m.
The tribunal ruled the capital value was only $2.8 million, and the kiwifruit licence was “not an improvement to the land or for the benefit of the land”.
Earlier this week, the High Court heard when such properties were bought and sold, the price paid reflected the value of the vines and licences which almost always transferred with the properties.
This is subject to Zespri’s approval to transfer the licence which has never been denied.
The court said those licences effectively ran with the land and enhanced its value.
It said the capital value — as a proxy for fair market value — included the licence.
The court heard the SunGold licences at September 2020 were worth around $800,000-900,000 per hectare, compared to green kiwifruit at $300,000-450,000 per hectare, and $30,000-50,000 per hectare for crops such as oranges, avocados and feijoa.
Reacting to the decision on Friday, NZKGI, which represents growers, said it was disappointed with the High Court’s judgment.
“NZKGI has advocated strongly on behalf of kiwifruit growers and recognises the importance of these proceedings as they are the first in New Zealand and thus precedent-setting,” chief executive Colin Bond said.
“Increasing industry costs can make the kiwifruit industry a less attractive investment and reduce growers’ spend in local communities, ultimately impacting upon economies across New Zealand.
“Gisborne growers return over $80m to the Gisborne economy and should be supported by their council.
“In 2022, growers paid a median of $921,150 (including GST) per hectare for SunGold licence.
“This result is not just an issue for kiwifruit growers in the Gisborne district as the decision could be wideranging with other councils across New Zealand indicating that they will follow suit.
“Further, NZKGI acknowledges that this test case is eagerly watched by other sectors of the horticultural industry, concerned that local councils might adopt a similar approach over their land valuations.”
NZKGI would seek leave to appeal from the High Court for this test case. The group believed the value of a licence should not be included in the capital value of land and that there were strong grounds for an appeal, he said. ■