Mayor Brown misleading on real impact of property revaluations

Councillors need to clip Mayors budget wings.

[Statement from David Thornton]

There can be no doubt that many ratepayers will face significant rates increases for the next three years as a result of the new revaluations.

Mayor Brown is misleading the public when he says the average rates increase will be 2.5 per cent. The truth is that the Mayor is planning to increase the total amount of rates the Council collects by 2.5%, which is about $40 million.

The total rates demand will be about $1.4 billion, and will be collected from all ratepayer groups including, business, rural and residential.

The revaluation will decide how much each ratepayer will pay.

Business ratepayers do pay more than residential ratepayers but Mayor Brown is changing that by reducing the gap between businesses and residential, which will add to the increase for residential ratepayers.

Another concern is that an estimated 25,000 residential ratepayers will still be paying increases from the 2011 revaluation which placed a 10% cap on increases arising from the shift to Capital Value.

The critical issue is that property values are the basis on which rates are set and any change in value changes the rates which will be charged.

When the changes in value for individual properties, across the whole Auckland region, vary from zero to 65%, there will be huge changes in the rates payable on individual properties.

The Council can relieve some of the changes by using a Uniform Annual General Charge which is a fixed charge payable on each separately rated dwelling. The payment reduces the amount payable on the value of the home.

This charge is currently $375 per dwelling but could be increased to $850 per dwelling; the effect of increasing this charge is of benefit to higher value homes, but detrimental to lower value house,

This issue is proving very divisive among the 21 members of the Council's Governing Body who will make the final decision

While ratepayers contemplate rates increases the Auckland Council has now to face a revolt from all the Local Boards who are resisting the Mayors call for cuts in local expenditure on services for local communities,

Ratepayers are faced with rates increases but fewer services.

Rising rates come from increased expenditure – the Mayor is already calling for expenditure cuts, but he is still demanding funding for the Central Rail Link. That project alone has the potential to place a huge burden on ratepayers – a point made by the Prime Minister this morning.

It is now time for Councillors on the Governing Body to clip the Mayor’s budget wings and cut out or defer non-urgent projects and give ratepayers the services they are paying for.

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