We mentioned this in a post last Wednesday. The obvious system would be to base the amount each household (“rating unit”) pays on the value of the property — the higher the value of your property the more you pay, and that is what happens in Wellington.
But only 43% of what is charged in Kapiti is based on that: 51% comes from fixed charges where every household pays the same regardless of their situation and income.
Unfair? Of course. So propose that Kapiti does what Wellington does.
As a second separate topic, the announcement states: “Councillors will be online to discuss our current and proposed approach to addressing stormwater flood risks”
We’re unsure what either approach is, so it will certainly be something to watch!
The FB link
“As part of the Council’s long-term planning we’ve reviewed our rating system, which sets out the way that rates are allocated among the district’s approximately 25,000 ratepayers. Note this does not affect the total amount of rates we collect.
“With the aim of ensuring that our rating system is equitable and affordable for our ratepayers, we’ve developed a proposal, which has two changes:
• $7.6 million of the districtwide roading contributions would change from being a fixed charge to a charge relative to a property’s capital value; and
• $0.5 million of economic development funding would be transferred from the districtwide general rate to a new $0.5m commercial targeted rate. Only commercial properties would contribute, in relation to their capital values.
“Join us on Facebook on 11 April, from wherever you are, between 7pm and 9pm. Councillors will be online to discuss our current and proposed approach to addressing stormwater flood risks, and to answer your questions.
“Can’t make it on the night? Send your comments and/or questions to us via private message, and we’ll post them for you on the night. We’ll also respond to you privately post-event.”
Please also put notice on Neighbourly as not everyone has or watches Facebook.
We need all that we can get.
Why is this an obvious system(paying on value of property)?? Rates should be a charge for services and not a secondary form of income tax or property tax.
It should be based on ability to pay. Poor people can’t afford what rich people can.
There’s already measures in place to accommodate people who can’t afford to pay with rebate system. How are they measuring wealth of rate payers – it is not done by income analysis but by property price analysis. Are they suggesting selling inherited property for example?
Only a small component should be on property value and q larger component on user pay model or occupancy numbers.
I completely disagree that moving to capital value as a rating basis offers fairness in any way. If I happen to spend $100,000 improving my living conditions by installing double glazing, insulation, quality curtains, carpets etc I use no more council services and should not be penalised for that. It it nothing other than socialist wealth re-distribution.
Income it already taxed at the central level. We, as ratepayers and residents, should be hounding central government to share central taxes with local government for services provided by them, especially those services mandated by central govt.
Otherwise, user pays is supposedly the basis for everything else and should be for rates too.
I too, agree, that occupancy numbers would be a better model for rates assessment.
Property taxes based on capital values to fund local authorities is how it done in America. It has two components:
1. The unimproved site value or land value is community generated, not only public infrastructure but the infrastructure created by everyone around the property. Should all land value increases go solely to individuals when the community has generated them? That encourages speculation.
2. Improvements on land — landscaping and buildings — which are capital. This is where it becomes more ideological. But we accept (or most do) the principle of a progressive income tax. Otherwise you could argue that everyone in the country should pay fixed charges to the central government too, regardless of their income.
Capital values in NZ for rates include the land value. You could make a solid argument that land (unimproved site) values should be the sole basis, and there are those who so argue.
I would live with land values but capital values no way.
Land value is irrelevant also imho.
Your view is the same as this inept council. That being rates are a property tax; why?.
Rates should to fund services provided by council and nothing to do with house values.
I can understand a small component being linked to property (not solely land value) to try and extract more from the perceived wealthy but this should really only be relevant for the shard services like parks, etc which have no feasible user pays model.
Income tax and benefits system is already designed to extract more input to central govt funding from the wealthy (whether this is enforced correctly is another matter and is not the role of a bunch of administrators at a small council)
Obviously we need to agree to disagree on the principles. Milton Friedman, the darling economic of politicians like Reagan and Thatcher, described the single tax on land value as “the least bad tax.”
For most people, however, the way local government tax calculated is much less important than the way it is spent. In Kapiti a huge amount goes to fund an inefficient bureaucracy top heavy with chiefs and lacking in “indians”. We’ll be posting our LTP submission shortly which will have plenty to say about that.
Yes I agree the way the council has a general disregard for public funds is the core issue but I find it quite surprising the backlash against the current proposed rises. Maybe this is because I have experienced higher rises over the last 8 years than it appears the majority; current rates bill is in excess of 5.4k (excluding water) and this years proposed is actually much less than the $400 rise experienced last year.
It seems the new proposals are similar to what we have always been experiencing but now affecting more people. I’ve tried to fight the council over it but it seems lots of the community have been happy with council performance – I guess expectations are less when not being hit with constant excessive rises; maybe the increased impact will aid support.
For that money I get to live in a poorly lit, pot holed street and consume less council services than the majority of the district I suspect. There are no free electric BBQs anywhere near me for example ….
Too true. How the revenus is generated is secondary to what any such revenue is spent on. KCDC does seem bloated, inefficient and divorced from residents and ratepayers.
I have booked s couple of days next week to work on our submission to the LTP and GRWC’s miney grab too.
How is it that we get to subsidise the Wellington bus service? We’ve only got a train that relatively few of us use and a couple of local bus services.