Rateable Value on a property explained

Our Colliers Otago real estate professionals operating in Queenstown and Dunedin, are regularly asked what the RV (or CV - Capital Value/GV - Government Valuation) is on a property. The RV is the Rateable Value – a figure which the local council uses to set the rates payable each year on a property. The RV is the value at the date it is set (usually every three years) and constitutes three elements:

Capital Value

Capital Value is the total value of the property as set by your local authority, comprising a combination of:

Land Value:

• Land value is the land portion of the property value

Value of Improvements:

• Value of Improvements refers to anything that is on or for the benefit of the land, including the house, landscaping etc.

How is RV calculated?

The RV is generated based on the Land Value and Improvements Value of the property. The land value is relatively straightforward to calculate based on recent sales similar to the subject property, however improvements can require a more complex assessment. The assessors aren’t necessarily aware of the exact state of the buildings on a given property. Perhaps the owners have installed a brand new, high-spec kitchen or bathroom, the driveway may have been re-done, or extensive landscaping completed on the property. Essentially anything which didn’t require resource consent may not be considered when the RV is set.

Is market value the same thing as RV?

RV is not necessarily the same as the market value of a property. Property prices are not a static thing. They are a figure based on the current market, which is negotiated between property buyers and sellers. The price of a property can vary from a seller’s perspective based on what they want to do following the sale and from the buyer’s perspective based on what else they can get for the same investment. Considering the value of a property requires research into factors that can create an emotional response for buyers, such as the charm of the local neighbourhood, proximity to schools and amenities, ease of transport in the locality and visual appeal. Market factors such as the supply and demand ratio, credit availability, interest rates and economic conditions can also play a significant part in influencing the market value.

How do I decide what to offer on a property?

As property professionals, we encourage buyers to consider their priorities in the purchase, alongside local relevant sales when formulating the price they wish to offer. Market value is determined by making comparisons and can be impacted by a wealth of environmental and personal factors alongside the asset's bricks and mortar ‘value’. Therefore, the value of a property in any given market is what buyers are willing to pay in order to own the property.

It’s the role of our Colliers Otago sales consultants to understand and analyse the value of properties in the Queenstown-Lakes, Dunedin and wider Otago areas. If you’re considering a property sale or purchase, talk to our Colliers Otago experts about what competing property prices look like in the current market and make use of our access to up-to-the-minute data. Alternatively, consider obtaining a private valuation by an independent registered valuer. Our Colliers Otago valuation team are market-leaders in Queenstown, Wānaka, Central Otago and Dunedin.