The Court of Appeal upheld an earlier High Court decision which said the Trust's SunGold kiwifruit licence was intrinsically linked to their land and therefore part of the property's capital value. Photo: Cole Eastham-Farrelly
Some kiwifruit growers are starting to receive massive hikes in their rates bills.
This comes as councils follow Gisborne District Council's (GDC) lead of including the value of gold kiwifruit licences as part of a property's rateable value.
Three years ago, Gisborne kiwifruit grower Tim Tietjen's Bushmere Trust, and supported by the NZ Kiwifruit Growers Incorporated (NZKGI) challenged Gisborne District Council's decision.
Last week, the Court of Appeal upheld an earlier High Court decision which said the Trust's SunGold kiwifruit licence was intrinsically linked to their land and therefore part of the property's capital value.
NZKGI chief executive Colin Bond said the impact of GDC's actions were already being felt across the country.
Growers in the western Bay of Plenty were just receiving rates notices now and all had gone up, because the gold licence was included, Bond said.
"In some instances, we're seeing orchards double in value, in terms of rates value. In one case, I've heard of a a tripling of their rates bill," he said.
Bond said NZKGI continued to maintain the high value gold licence - in 2022 the median price was $921,150 (including GST), this year it dropped to $700,000 (including GST) per hectare - was personal property and should not be rateable.
"We're seeing more instances of growers making a decision about their gold licence independent of their property," he said.
"Definitely, there are instances where an owner would retain their land but convert from gold to red or gold to another variety and sell their (gold) licence to do that.
"So our question remains now, how is that going to be picked up in the changing value of rates in the future off the back of the Court of Appeal's decision."
The court acknowledged the value of Sungold Kiwifruit orchards may fluctuate due to market price and climate change. It said there was a process for a ratepayer to request a new valuation if that happened.
Bond said the organisation wanted councils to have a mechanism where the sale of a gold licence was identified and removed from rates demands quicker than the three-year re-valuation cycle.
But he said for now growers who believed their rates did not reflect the property's market value should get a re-valuation done.
In March this year, a Te Puke-based rural real estate consultant of 35 year's standing said kiwifruit orchard prices had plummeted 30 percent.
Stan Robb said sales were stalling as sellers were asking unrealistically high prices, and there was concern about what would happen in the up-coming gold licence round.
He said any drop in the licence rate would immediately lower an existing orchard's value.
