Capital Value (CV)
The council's assessed total value of a property, including both the land and all buildings or improvements, used primarily for calculating rates.
What is a Capital Value (CV)?
Capital value (CV) is one of the three components of a council's rating valuation. It represents the total assessed value of the property โ the land plus all buildings and improvements. The other two components are land value (the value of the bare land alone) and improvement value (the difference between capital value and land value).
Councils are required to revalue all properties in their district at least every three years. The valuations are carried out by registered valuers using mass-appraisal techniques โ they look at recent sales data, property characteristics, and market trends to estimate values across the district.
Capital value is the figure most commonly quoted as the 'council valuation' or 'RV' (rating valuation). While it provides a useful reference point, it's a mass-appraisal estimate and may not reflect the true market value of a specific property. Properties regularly sell for more or less than their CV depending on condition, location, market conditions, and buyer demand.
Why It Matters for Due Diligence
Use the CV as a reference point, not a price guide. Compare the asking price to the CV to understand whether you're paying above or below the assessed value, and investigate the reasons for any significant difference.
The CV is also useful for estimating future rates โ if the CV increases at the next revaluation, your rates will likely increase too. Understanding the CV helps you budget for ongoing ownership costs.
How to Check
Capital values are publicly available from your local council's website, from QV (qv.co.nz), or on the LIM report. The real estate listing should also show the CV. Your council can provide details on when the last revaluation occurred and when the next is scheduled.
Frequently Asked Questions
Why is the asking price so different from the CV?
CVs are mass-appraisal estimates done every three years and may not reflect current market conditions, recent renovations, or unique property features. In a rising market, properties often sell well above CV. In a declining market, they may sell below.
Does a high CV mean high rates?
Generally yes โ rates are calculated based on property value (CV or land value, depending on the council). A higher CV relative to other properties in the same council area typically means higher rates. However, the council's rate in the dollar also matters.
Related Terms
Land Value
GlossaryThe council's assessed value of the bare land only, excluding any buildings or improvements, used as part of the rating valuation.
Improvement Value
GlossaryThe council's assessed value of the buildings and other improvements on a property, calculated as the difference between capital value and land value.
Latest Practicable Valuation (LPV)
GlossaryThe council's most recent rateable valuation of a property, used to calculate rates and provide a general indication of property value.
Rates
GlossaryAnnual property taxes charged by your local council to fund public services, infrastructure, and local government operations.
LIM Report
GlossaryA Land Information Memorandum โ an official council report summarising everything the council knows about a property.
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