Rates shift proposed for forestryFriday 2 Feb 2024
A 600ha forestry block in Wairoa will pay less in rates than some homeowners under a controversial rates proposal by Hawke's Bay Regional Council. A local government rates expert has criticised the council's plan to dramatically change its rates system, which will see rates drop for the likes of forestry and rise for the likes of homeowners. However, the regional council believes it will be "more equitable" to shift from land value (LV) to capital value (CV) to calculate rates, as well as simplify targeted rates and move some services to the general rate like pest control. If adopted, the proposal will not see the council collect more rates overall but will change the proportion of rates each property pays. In effect, forestry blocks and farmers will be among the winners with a reduction in rates, while homeowners and many growers will be among the losers facing an increase in their annual bill. A regional councillor says one factor behind the reduction in forestry rates was an "accounting anomaly" by which trees will not be counted as "capital" if the council shifts to CV. Pest management will also make an impact, as only a select number of properties like forestry currently pay for that service (through a targeted rate) which will move to the general rate and be shared by all ratepayers. According to a list of sample properties, a 600ha forestry block in Wairoa will pay around $610 per year in regional council rates under the proposed changes, down from an annual bill of $2,320 . Other forests will be charged more depending on where they are and their size. The proposal is for the regional council's annual rates bill and will not impact district and local councils. A major part of the proposal is switching to capital value (CV) instead of land value (LV) to calculate each property's proportion of rates. The council currently uses land value. "CV can be considered to be more equitable than LV because it considers the value of, and the capacity to earn from, both the land and the improvements on the land [such as buildings]," a consultation document read. Councillor Martin Williams said there was an "accounting anomaly" for setting values for forestry blocks by which trees were not counted as "capital" - which will impact valuations and therefore rates. He said properties were valued by an independent valuer and not council, so the regional council could not simply change valuations for forestry blocks. He invited people to submit on the proposal, including the possibility to "apply a differential on forestry". In general, he said the proposal had merit.  | ||
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