Rates, Rating Valuation and Statutory Valuations
Rates, Rating Valuation and Statutory Valuations tests the rating system and valuations required by statute. You need to distinguish market value from rating value, understand rating units and objections, and calculate rates.
Rating valuation
Local Government (Rating) Act 2002 requires territorial authorities to maintain a valuation roll and revalue at least every three years. Rating Valuations Rules 2008 prescribe capital value, land value and annual value. Capital value reflects the unencumbered estate; land value excludes improvements; annual value reflects rent. A rating unit is the unit of rating, not necessarily a separate title. Objections go to the territorial authority within the statutory period, generally 20 working days.
Worked example
A property has a capital value of $820,000. The general rate is 0.35 cents per dollar of capital value and the fixed charge is $450. General rate = $820,000 × 0.0035 = $2,870. Total rates = $2,870 + $450 = $3,320. If the owner objects that the CV is 30% above market, they need sales evidence, not just rates affordability.
Statutory valuations
Compulsory acquisition under the Public Works Act 1981 requires compensation for land taken and injurious affection. Rating valuations are not compensation valuations. Statutory valuations must follow the relevant Act and valuation date.
Traps
- Using rateable value as market value in a report.
- Confusing land value with capital value.
- Missing the objection deadline.
- Calculating rates on land value when the rate is set on capital value.
- Ignoring the statutory basis for compensation.