Rating Valuations on Maori Land

The rating valuations of Maori Freehold land were discounted in accordance with Guidelines issued by the Office of the Valuer General as a result of a 1997 Court of Appeal case, Valuer General v Mangatu Inc. The guidelines have been reviewed and a new method of discounting took effect from the 2019 rating revaluations.

The rating valuation process starts at the point of a market value. That valuation is discounted to reflect the additional cost, effort and time that would be required to sell, compared to other land. This includes notifying the owners and obtaining confirmation of the sale from the Maori Land Court.

The current discount has three components:

• A lump sum deduction if $7,000 for all Maori Freehold Land to reflect the administrative cost of complying with Maori Land Court rules.
• A discount based on the number of owners, this varies between 3.5% for less than 10 owners to 10% where there are 100 or more owners.
• Additional discount for sites of special significance. This is between .5% and 1.5% depending on the type of site. Where more than one site of significance is located on a piece of land the percentage applies for each site with a maximum of 5% discount.

The discounting is not intended to “devalue” or disadvantage Maori land. The purpose of a rating valuation is to provide the Council with an equitable base for its rating system by using the market value across the District at a point in time. The discount adjustment recognises that it would be inequitable to assess rates on a market value that could not be achieved due to restrictions on the sale of the land.

The Person Using Maori Freehold Land is Responsible for Rates Payment

A person actually using a rating unit of Maori freehold land in multiple ownership that is not vested in a trustee; or a separate rating area, is liable for the rates on that land or separate rating area, whether or not that person is one of the owners of the land, or a person appointed under section 94(2) of the Local Government (Rating) Act 2002 to receive the rates assessment and the rates invoice for the land.

A person actually using land or a person actually using a rating unit means a person who, alone or with others –

• Leases the land
• Does one or more of the following things on the land for profit or other benefit:

1. Resides on the land
2. de-pastures or maintains livestock on the land
3. Stores anything on the land
4. Uses the land in any other way.

Ability to Write-off Rates Arrears

Councils must write-off outstanding rates that they consider unrecoverable on any land. This must include rates debt inherited from deceased owners of Maori freehold land.

The amount of any rates that are written off must be included in the notes to the financial statements of the Council and published in the Council’s Annual Report for that year.