Auckland homeowners got their new CV at the start of the month. Photo / Fiona Goodall
Diana Clement: Many Aucklanders will be unhappy with their new property valuation.
Auckland Council is bracing itself for a surge of objections to the new property CVs it issued at the start of the month.
Homeowners have until April 22 to contest their new CV, which will have bearing on the size of their rates bill.
CV stands for Capital Value and is often used interchangeably with the term Rateable Value (RV) or Council Value. Auckland’s latest CVs were delayed by nearly two years and were set mid-last year in hot market conditions – but the market in the city has slumped since the start of this year.
Some homeowners may consider their CV too high as a result of changed market conditions; while an equal number may be worried their new CV is too low.
At the last valuation in 2017, 1.8% of homeowners in Auckland contested their CV, which if repeated this time around, means the council faces more than 10,000 objections over the coming month.
The council expects it will take five to six months to process and evaluate all the objections to 2021 CVs. In 2017, 25% of objections resulted in no change to the CV.
James Wilson, head of valuations at OneRoof’s data partner, Valocity, said a CV could be wrong if an owner or previous owner hasn’t kept the council updated as to any changes done to the property.
“If the data on your property is accurate, then in theory, the CV should be in line with the market. However, if you haven’t updated your data, then the flow on effect would be that your CV is unlikely to reflect [the true value],” he said.
“If you’ve done some work on your property that required building consent, the council will have a record of that and they will include that in the valuation once the consent has been completed.
“But there are things that a homeowner might do to a property that might not need a building consent. For example, they might modernise their bathroom or kitchen. Many people won’t get their CV updated to reflect that at the time when it’s done. If you do, then at the general revaluation you’re more likely to get your CV reflecting a market level.”
Wilson said that work that could end up changing a property’s CV upwards might include landscaping, and other outdoor works that don’t require consent, but have a big impact on the overall appearance and sale ability of a property.
Everyone had the right to object, Wilson said. “It doesn’t cost you anything. And so, I think you should consider doing so.”
The process is online and fairly straight forward. The form includes the details homeowners need to give the council, including the value the homeowner thinks the property should be valued at.
“If you just want your valuation higher or lower, because it suits you and you haven’t really got any evidence as to why that should be, then your objection might not be effective.”
Chloe Woollard, Auckland Council’s manager of valuations, expects it would take around four to six months to process the objections to the latest CVs.
She said that as part of the process a council valuer would visit the property and assess it from the outside. “If the objector consents, we will undertake an internal inspection.”
Ray White chief operating officer Daniel Coulson said CVs had very little bearing on sale prices. Photo / Supplied
Wilson said that many homeowners who contest their CV fear that their rates will rise if they have a high CV. Other homeowners fear that a low CV would harm their chances of selling their property at a good price.
It’s a myth, however, that a lower CV would significantly reduce your rates bill, said Wilson. “Don’t try to artificially lower your CV. The impact on rates is quite minimal.”
It’s also a myth that CVs impact sales, said Ray White chief operating officer Daniel Coulson. “I would say it’s got very little relevance to the sale price of the property. So, it wouldn’t be worth [objecting]. The CV should be seen in isolation and that is for the rating purpose of the property.”
Woollard said that the council received a steady stream of phone calls after CVs go out. “The main misconception is that a property value will impact your rates. Just because your valuation has gone up, it doesn’t mean your rates are going to go up.”
The closing date for objection is 5pm on April 22. The council will take late objections in extenuating circumstances. Auckland homeowners could also lodge an appeal to the Land Valuation Tribunal, said Woollard, adding that in 2017 all but one of the appeals was settled out of court.
Any changes to rates take effect from July 1, this year.
Mount Victoria, in Wellington. Photo / Getty Images