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Tuesday, April 26, 2011

Rates to rise after quake hits values

Rates to rise after quake hits values

Last updated 05:00 26/04/2011
Canterbury householders will have to dig deeper into their pockets to make up a rates shortfall.

Thousands of properties were badly damaged in the February 22 earthquake.

Environment Canterbury (ECan) believes the quake has cut between $1.4 billion and $3.2b from the capital value of properties around the region, equal to a $881,000 reduction in its expected 2011-12 rates take.

That shortfall will be spread across the region, ranging from an extra $28.38 for a rural property worth $7 million down to an additional 69c for an urban one worth $170,000.

The cost of last September's quake has already been incorporated into the 2011-12 draft annual plan.

At a meeting of the finance and audit committee last Thursday, ECan commissioners supported a recommendation to share the loss across the region.

Proposals were considered to seek funding for rates remissions or recover the shortfall only from Christchurch City ratepayers.

A full ECan council meeting on Thursday is expected to endorse the committee's decision.

A report by acting chief financial officer Helen Sellwood said the quake implications would affect short to medium-term ECan operations.

The capital value fall was based on: 635 commercial properties are likely to be demolished.

1378 (plus or minus 25 per cent) red-stickered commercial or heritage buildings might have to be demolished.

1864 residential properties are likely to be demolished.

Between 1000 and 4000 residential properties would have land damage requiring remediation.

Between 1000 and 3000 residential properties might be uneconomic to repair and would be vacant while they were rebuilt.

"February's earthquake is significant for Christchurch City's capital values and, to a lesser extent, for the Waimakariri and Selwyn districts," the report said.

Under the recommended 2011-12 proposal, a Christchurch householder with a property worth $400,000 will have to pay $3.69 more, while the owner of a $1m property in the Waimakariri District will have to pay an extra $4.51.

Incoming cashflow included $26.8m in rates from Christchurch City, $2.6m from the Ministry of Civil Defence for claims by the end of June, $1.7m from water charges, $500,000 from ECan's insurers and $7m from the New Zealand Local Government Insurance Corporation.

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