Give CIV the NIMBY treatment
Question: Who will be the big winners if CIV rating is introduced in the City of Monash?
Answer: Owners of vacant lots and derelict buildings.
The site value (SV) is the value of the land alone. The capital-improved value (CIV) is the value of the land plus buildings.
For a vacant lot, these two values are the same. With the “rates in the dollar” quoted in the council’s brochure on rates reform, the owner of any vacant lot would pay 37% less under “simple” CIV than under SV. And under “CIV with differentials”, the owner of a vacant residential lot would pay 43% less than under SV, while the owner of a commercial or industrial “bombsite” would pay 6% less than under SV.
It is curious that the 4-part “example” in the brochure does not include a vacant lot with the same site value as the other cases. If it did, the owner of the vacant lot would pay the same as the owner of the 3-bedroom house under SV, but would pay 29% less under CIV.
Owners of derelict buildings, which are worth almost nothing in addition to the site values, would fare similarly to owners of vacant lots.
In a nutshell, CIV punishes the owners of well-maintained buildings in order to reward the owners of bombsites and eyesores. If I were a Monash ratepayer, I’d be screaming “Not in my back yard!”