Background: Rates Valuations & Kiwifruit Licensing
SunGold™ is the dominant gold kiwifruit variety in New Zealand, as it is Psa-V resistant. Growers must hold a licence from Zespri to grow it. The licence is not legally an estate or interest in land; it is a personal contract between the grower and Zespri and relates to a specific area of land. The main way to obtain a licence is to buy a SunGold orchard and have the licence transferred. Zespri must approve the licence transfer and from there will then enter into a new contract with the purchaser.
In a radical shift from previous rating policy, the Gisborne District Council in 2020 decided licences for the SunGold or G3 variety of gold kiwifruit – licensees Tim Tietjen and his fellow growers buy from kiwifruit marketer Zespri – would now be counted as land improvements and billed accordingly. Instead of his property having a rated value of $2.8 million, it was now calculated at $4.1 million.
NZKGI made the decision to take the council to court over the new ratings calculations, and as its representative for Gisborne, Tim Tietjen, and his family company Bushmere Trust put his name on a case taken to the Land Valuation Tribunal. At the tribunal hearing it was ultimately determined that a kiwifruit license should not be deemed an enhancement to the land.
The High Court in 2022 then ruled that the value of a SunGold kiwifruit license, owned by Bushmere Trust, must be incorporated into their property’s capital value. This verdict diverged from the Land Valuation Tribunal’s initial judgment.
In May 2023, our efforts continued unabated as NZKGI presented our case in the Court of Appeal. Our legal team gave its final opportunity to succinctly highlight the facts and history and elaborate our main arguments. We maintained that market value is not synonymous with capital value of land; that the enhancement effect is inapplicable here; and the license does not run with the land. After a thorough hearing, we were optimistic that our argument – rates should be based on land value, not on the value of a business operation such as a kiwifruit license – had found solid footing.
In July 2023 it was announced that appeal was dismissed, ruling SunGold kiwifruit licences can be included in a property’s rateable value.
We were advised by QV that all districts revaluated over 2022 will hold the SunGold license value.
The implications of this case are significant, and they will affect all SunGold kiwifruit growers, and potentially other horticulture industries that use similar licensing models.
Next steps for NZKGI
NZKGI plans to continue to object to the stakeholders involved in orchard rates, especially taking the recent downturn of the industry into consideration. Growers will be informed of NZKGI’s continued activities in this area over the coming weeks.
The kiwifruit industry is a significant contributor to the local economy, providing numerous employment opportunities and fostering economic development. Consequently, the need for fair and equitable rating policies becomes more pronounced — not only to support our industry but also to maintain and promote local economic prosperity.
Next steps for growers:
We encourage growers to raise objections about their own rate valuations with their local councils through QV. NZKGI is in the process of compiling more information on the most effective way growers can object. We will be sharing more information in the upcoming weeks.
If you have any questions pertaining to rates please contact our Senior Policy Analyst, Abby Van De Ven here.