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NZ 18.6% rates rise incenses homeowner

Property Here - Tuesday, August 13, 2013

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Extension boosts valuation but householder says letter last year stated rates would not rise more than 10%.

Darren Priest outside his home in Flat Bush where his rates have increased by 18.6 per cent. Photo / Dean Purcell
Darren Priest outside his home in Flat Bush where his rates have increased by 18.6 per cent. Photo / Dean Purcell

The council has promised to cap rates rises at 10 per cent, but some confused residents have seen their bills leap by almost twice that.

In the past year, Darren and Petra Priest have added an extension to their Flat Bush home that boosted its valuation by $100,000 to $690,000. The Auckland Council said this had made them ineligible for a transition adjustment.

But Mr Priest said this was not communicated to him, so it was a shock to get an increase of 18.6 per cent to his rates - especially because the council sent him a letter last year promising rates would never increase more than 10 per cent.

It wasn't until the Herald asked the council about Mr Priest's increase that it was discovered his home fell into a "loophole".

He complained last Thursday but was told a response would take up to 20 working days, potentially after his first bill was due.

"It's just disappointing," he said.

"We still get the same services that we got before we put the extension on. We still get one recycle pick-up, we still get one street clean once every six months if we're lucky, we get the lawns mowed out the front ...

again, once every six months if we're lucky."

A spokesman for the council, Glyn Walters, said general rates were based on a property's capital value.

Mr Priest's property was not eligible for a transition adjustment because under legislation, transition adjustments are available only on properties that have had no changes since July 1, 2011.

The council does have a remission policy that provides the equivalent of a transition remission to changed properties, and renovations are included in this policy. The policy allows for the equivalent of a transition adjustment, calculated using the pre-renovation value of the property, Mr Walters said.

But because the unchanged value increase to Mr Priest's house was less than 10 per cent no remission was applicable.

More than 20 people contacted the Herald yesterday following an in-depth story on this year's rates rises.

Many residents said the letters were confusing and didn't clearly explain how the council's new rating system works.

Others were complaints about how much their bills had risen over the years.

One said since 2011 their rates had jumped 29.3 per cent.

Mr Walters said so far they'd received 48 rates complaints, down from 107 in the previous year.

The council promised an average rates rise of 2.9 per cent - down on earlier rises of 3.9 per cent and 3.6 per cent in the first term of the Super City - but 368,000 or 77.6 per cent of residential ratepayers are facing increases higher than this.