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Farmers' views sought on impact of valuation approach

13 October 2006

Land Information New Zealand (LINZ) will consult with pastoral leaseholders and interested groups on the impacts of changes to the way pastoral lease land is valued.

The Government today released a report on the valuation methods used to determine pastoral lease rents and tenure review transactions. The Government has also released its preliminary response to the report.

The report, prepared by a panel of senior valuers, sought to gauge whether the Crown was receiving a fair financial return on its high country land assets.

The report has brought to light important differences between the approach taken by valuers when valuing pastoral leases and the legal requirements of the 1948 Land Act, says LINZ's Acting Chief Executive, Warwick Quinn.

"Pastoral lease rents are set every 11 years. The changing property market in that time has really highlighted the impact that characteristics such as landscapes and views - and exclusive access to them - are having on the prices being paid for land.

"To date, however, valuations prepared for pastoral lease rents have not - or at least not fully - taken such characteristics into account."

Analysis of the valuers' report by government officials has established that these characteristics are required by the Land Act to be part of the rent-setting calculation, Mr Quinn said.

The report argued that there was no need for lessees to pay rent for such characteristics and that the legislation should be changed to reflect valuation practice.

However, Mr Quinn said for a valuation to comply with the Land Act, values for features like views and landscapes must be included.

"In some cases, this may mean substantial increases to rents for pastoral leases. The Government recognises that this may have significant financial implications for some high country farmers and the Crown.

"We want to meet with pastoral leaseholders and interested groups to fully understand these implications. Our objective is to reach a fair, reasonable and durable outcome," said Mr Quinn.

Over the next nine weeks officials will consult with pastoral leaseholders and other interested groups to consider options for addressing affordability that recognise the value of sustainable and economically viable high country farming.

Next Steps

  • LINZ, Ministry of Agriculture and Forestry (MAF) and Department of Conservation (DOC) officials will meet with leaseholders and representative groups over the next nine weeks. Other key stakeholders and interested parties will have the opportunity to make submissions.


  • Submissions are sought by 15 December 2006 (Note: extended to 15 February 2007). Submissions can be sent, in writing, to:

    High Country Pastoral Lease Valuation Reviews
    c/- Land Information New Zealand
    Private Box 5501
    Wellington 6145

    Or by email to: valuation-review@linz.govt.nz

  • LINZ, DOC and MAF will report back to Cabinet in April 2007 on the results of the submission process and options for addressing any implications of the new valuation methodology, including rent relief mechanisms if required.

Associated information

Contact for further information:

Dave Chowdhury
Senior Communications Advisor
Land Information New Zealand
Phone: 04 496 5402
Cell: 027 222 9566
Email: dchowdhury@linz.govt.nz

Tanya St George
Strategic Communications Manager
Land Information New Zealand
Phone: 04 498 3844
Cell: 027 287 9403
Email: tstgeorge@linz.govt.nz

 
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