Hi there,
Through my due diligence processes/research I came across a few councils in NZ that have built in search engines that let you look up the council rates etc.
I noticed that they had listed a rateable or capital value as well.
This may seem like an obvious, but I just wanted to make sure my thinking was correct. Does this amount simply represent the “land” value (including improvements) that the council has had the property appraised at?
(Mind you, some of the land values are extremely low relative to the improvements value)
Can this figure be relied upon to determine the overall value of the property I would be buying? Eg buying a property worth $100k when then rateable value is only $30k may not be as smart as buying a property worth $50k with a rateable value of $30k?
Can anyone with properties/worked for councils shed some light into this ? Eg what was the property purchased for, what was the council’s “rateable value” and the result of that came back from the independent valuers?
thanks for your help.
Andrew.Personally, I can’t see much relationship between the ratable value, and purchase/valuation price.
The plus side of having a low RV of course is that you don’t pay so much tax to the government!
Here’s an example of a property I own…
Ratable value
Land Value
(Sept 2003)
$2,000Capital Value
(Sept 2003)
$30,000Valuation done in September 2004 was $75,500 and purchase in December 2004 was $66,000.
If someone can shed some light on how the ratable value is arrived at and what it actually has to do with the valuation or purchase price in the buoyant market that we’re experiencing at the moment, I’d be keen to hear your opinions!
Playa Chicken
Hi Playa,
Thanks for the reply & the example.
I was wondering whether there was a similar concept to evaluate deals by.
This isn’t a direct parallel, but for example with say Listed Investment Companies/Property trusts they trade at a premium/discount depending on where the cycle is at the moment (however they generally trade at a discount…)
Anyway having said that there is probably no relationship between the ratable/land value and the independent valuations…
Or maybe the difference simply reflects the current value of the actual structure/house on the land…but I’m just speculating now [cap]
Cheers,
Andrew.Information on Coucil valuations is available from http://www.terranet.co.nz and they also have other useful reports and the prices are very realistic, I have used this service many times to look at rates info and previous sales for a specific property. Another useful resouce is http://www.qv.co.nz
they do valution type reports, a little more expensive, I have used them in Wellington for full Valuations and a depreaction schedule.Kiwi Investor
I live in Aust and have IP’s and contacts in NZ.KI
‘Don’t play by the rules, invent your own’
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