Common questions and answers
A rating value is assigned to every property in New Zealand. It is made up of:
- The capital value: the likely price a property would sell for at 1 September 2015.
- The land value: the likely price that just the land (minus buildings) would sell for at the time of the valuation.
- The value of improvements: the difference between the Capital Value and the Land Value. It reflects the value which buildings and improvements add to the bare land.
In Hamilton, Quotable Value (QV) is the valuation service provider contracted by Council to review and maintain property valuations.
The process to determine residential valuations is a follows
- Rating values are calculated using a complex process called mass appraisal.
- Valuers consider relevant property sales from your area around the time of the valuation. A market trend is established and applied to similar properties.
- A number of individual properties are also assessed every year because of issued building consents, and other inspections. These individual assessments enhance the mass appraisal process.
- The entire process is also independently audited by the office of the Valuer General. Strict quality standards must be met before your new rating value is confirmed.
- The land value is firstly determined. Land is valued as if vacant, and on its highest and best use. Highest and best use means that if land has development potential, this will be factored into the value.
- The capital value is then determined. This reflects the likely value the property would sell for as at 1 September 2015. The capital value does not include chattels.
- The improvement value is the difference between the capital and land values.
Commercial, industrial and rural properties are determined by the market and other factors such rental returns. They do not include chattels, nor do they include GST.
My land value has increased, but my capital value has stayed the same.
The improvement value is merely the difference between your capital (total) value and your land value. The capital value should reflect what you property would sell for based as at 1 September 2015 (excluding chattels). As the land must be valued on its highest and best use, this may be, in some cases, a higher component of your total value due, to potential such as size and zoning.
The improvement value is not always an accurate assessment of replacement cost of the dwellings.
Refer to 'the process to determine residential valuations'