If you are a property owner in the region, by now you will have received your new Capital Valuation (CV) from the Central Otago District Council (CODC).

Your property has almost certainly increased in value, possibly quite significantly from your 2019 CV. What does this actually mean?

An increased CV has two impacts on most people: it affects how potential buyers view the value of their property and it affects their rates.

Let’s look at the market impact first.

There’s a segment of buyers to whom your CV will provide a clear guideline as to what the purchase price of the property should be.

These buyers want independent verification of whatever a real estate agent is telling them, so they pay attention to “objective” valuations.

However, the CV is not always an accurate reflection of a property’s value on the market.

They are a record of value at a snapshot in time – and our new valuations took that snapshot in October 2022 when they market was still firm. Hence, they might seem a bit high compared to what’s going on in sales today.

CVs are also only a desktop valuation, worked up from recent sales statistics rather than actual inspections. The council doesn’t know what has gone on in the inside of a house. Home improvements or renovations that have not involved a code of compliance or resource consent will not be accounted for in these values.

Which brings us back to rates – if you think your new CV is too high or too low, what impact does it have on you?

Obviously, your valuation affects your rates. But that impact might be less than you think – a higher CV doesn’t mean your rates will automatically increase proportionally. Rates also depend on land use, your location, and what services the council offers – like waste management, library services and so on – in your area. Some of these components are independent of your property value.

Ultimately, the sale price of your property will be determined by interested buyers, not by your CV. But if you feel that your new CV is way out in terms of value, you can challenge it by filling in this form before 21st April. If you intend selling your property in the next 12 months, and you feel the valuation is low, this might be worthwhile.