Rating Systems in New Zealand:
An Empirical Investigation into Local Choice

Authors: William McCluskey, Arthur Grimes, Andrew Aitken, Suzi
Kerr, and Jason Timmins

Start Page: 381
End Page: 398
Volume: 14
Issue Number: 3
Year: 2006
Publication: Journal of Real Estate Literature

Abstract: Local governments in New Zealand raise approximately 60% of revenue from property
taxes to fund the delivery of local services. With local government given the legislative power to choose the basis of their property tax, this research provides empirical insight into variations between local governments and the property tax system employed. As several local authorities have opted over the last twenty years to change their rating system, the paper investigates if there are factors common to those authorities that could help explain these shifts. The research uncovers a pattern that relates the choice of rating system to the level of mean income within local authorities.
Some tentative conclusions and implications are suggested both for New Zealand local public finance and for the use of property, and particularly land taxes more broadly.