Types of audits
The audits ensure that valuations made by local councils comply with the Rating Valuations Act 1998 and the Rating Valuations Rules 2008.
View the Rating Valuations Rules 2008
View the Rating Valuations Act 1998
Revaluation audits apply to every local council, but roll maintenance, objections, and process and controls audits are on a targeted basis.
A revaluation audit checks the overall accuracy of rating valuations that have been set for the purpose of determining property values across a district, for example Hamilton. These are the values that the council uses to set council rates and a revaluation is done once every three years. We have outlined the process of this audit below.
- At the start of the calendar year, the council contacts the Valuer-General. The council will notify the Valuer-General of its intention to conduct a general revaluation, and the date that the revaluation will come into effect. This allows the audit planning to start.
- The Valuer-General sends an audit engagement letter to the council with a copy also sent to the council’s valuation service provider, e.g. QV.
The letter asks for:
- answers to some high level questions, for example whether there has been any recent changes to the District Plan
- a report on the methodologies used in the revaluation (this is called the ‘basis’)
- market evidence – usually property sales for the area
- information on any key changes in the property market since the last valuation – for example new services in the area
- the conclusions reached for different property types – there are five main types: residential, commercial, industrial, rural and lifestyle
- the council to complete an assurance statement (there is an example of what this looks like as an attachment below).
- Valuation service provider assesses the proposed rating valuations. They then provide the Valuer-General with:
- a copy of the ‘basis’
- electronic information about all property and sales in the region.
The Valuer-General must receive this information at least 15 working days before the proposed date for the revaluation to come into effect.
- Valuer-General provides audit analysis and an on-site visit. The audit includes interviewing the valuers and meeting with Council staff involved to ensure that:
- they have considered all relevant evidence
- they have drawn reasonable conclusions from the evidence
- their conclusions have been applied correctly
- there are reasonable processes and systems in place to achieve compliance with the legislation.
- The audit results in the Valuer-General notifying approval to local Council to release the new values (implementation), or non-approval, in which case further work is required to achieve the appropriate standard.
Roll maintenance audit
The local council assesses any changes to properties that could affect their value, e.g. a new addition or substantial renovation, and added to the valuation roll in between revaluations. The Valuer-General audits this process.
The Valuer-General checks objections by owners to their rating valuations.
Process and controls audit
The Valuer-General tests the systems, planning and documentation to support a revaluation. The audit assesses how prepared a valuation service provider is for a revaluation. These audits focus on local councils where values are likely to change significantly compared to previous valuations, for example in Auckland city.