What is CV, RV and Market Value

What is CV, RV and Market Value?

What is rateable value, capital value, government value and market value? A question frequently asked and confused by many.

In Australia and New Zealand the rateable value (RV) is the value set by the local authority or council in order to determine rates for a property. The RV is also known as the capital value (CV) or the government valuation (GV) in New Zealand.

In New Zealand, the RV doesn’t usually take into account anything that makes a property better or worse than others in the area. For example, the condition of the house and land, chattels included or landscaping improvements.

In Australia, the rateable value is based on the market value of the land in its present state. This does include the value of any improvements made to the land, including filling, clearing, levelling and drainage works. This does not include structures such as houses, sheds and other buildings.

Sometimes the RV is a good rough-guide of the market value for the land. Other times it’s completely irrelevant. It’s important to understand the differences between rateable value, registered valuation and market price when comparing property values.

Rateable Value

New Zealand

Rateable Value is generated through computer analysis. No one physically visits the property. So rateable value does not take into account any improvements made to the property.

This value can be up to 50 percent different (up or down) from what the property has sold for.

Australia

Also known as land value, this valuation is actually determined by an estimate of the market value of the land (less dwellings). So it may be quite close to a registered valuation for the land only.

Registered Valuation

A skilled real estate professional can give you a registered valuation. They will utilise local knowledge of the area and review all sales records to establish a value. You can be more confident of the valuation if the agent has extensive industry experience.

Market Value

What a willing buyer is prepared to pay for the property – it’s that simple!

In other words…

  • rateable value is what you could pay
  • registered value is what you should pay
  • and market price is what you end up paying.