What is the difference between CV and market value?

Where each number comes from

A rateable value, often called the CV or capital value, is set by your council. Its job is to divide the rates bill fairly across the properties in the district. It is not built to price a house for sale.

It is assessed on a mass basis as at a stated revaluation date. Nobody comes inside the house. The council works from the records it holds and from sales activity around that date, across a whole area at once.

Market value is what a willing buyer will pay a willing seller for your house, in the condition it is in, with the buyers who are looking at the time. It is settled at the moment someone signs, not before.

Why they pull apart

The CV is a point in the past. Market value is a point in the present. That alone is enough to separate them, and the gap can run in either direction.

• Condition. The council has not been through your house. A renovated kitchen, a new roof, a rotting deck, none of it is seen.
• Work done. Additions, a garage, a second dwelling, may or may not be picked up, depending on what was consented and when.
• The particular property. Sun, aspect, noise, outlook, the street itself. A mass assessment cannot read these the way a buyer standing in the room does.
• Who is looking. A house is worth what the buyers in front of it will pay, and that group changes.

Using the CV when you sell

The CV is useful for the thing it was built for. Buyers do look it up, so expect it to come up, and expect to be asked about it if your price and the CV sit a long way apart.

For a view on price, a licensed salesperson can give you a written appraisal. Rule 10.2 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 says an appraisal must be provided in writing, must realistically reflect current market conditions, and must be supported by comparable information on sales of similar land in similar locations. That is evidence of what comparable houses have actually sold for, which is a different exercise from a council rating assessment.