Earthquake Minister Gerry Brownlee
Earthquake Minister Gerry Brownlee has ruled out sharing any profits made by the Government on red-zone properties it has purchased with the properties' former owners.
Brownlee said yesterday the Government did not expect any profit when insurance claims were paid out on its properties, but if there was any it would be "absorbed".
The Canterbury Earthquake Recovery Authority is getting independent valuations on red-zoned properties it purchased at 2007 rating valuations so it can negotiate with insurance companies over payouts.
The valuations will be calculated as at September 2010, prompting calls for red-zoned homeowners to be offered a bigger payout if the new appraisals come in higher than the rating valuations.
Brownlee ruled this out yesterday, but scotched as "rubbish," claims that the Government was seeking a profit from its red-zone property purchases.
He said the Government would prove it by revealing the figures once the process was complete, despite a Cera spokeswoman saying earlier this would not be the case.
Brownlee said yesterday it would not be "logistically" a problem to release the information, but a decision on how - and when - was yet to be considered.
The independent valuations would be done on selected red-zoned properties that the Earthquake Commission and insurer had classified as repairable, rather than a rebuild. Brownlee predicted about 100 to 200 properties would be revalued.
Labour's earthquake recovery spokeswoman, Lianne Dalziel, said the Government should challenge the insurance companies, but if they got more back, they should pay the difference to homeowners who took option 1 - to get a payout from the Crown on their home and land.
Cera ruled out factoring independent valuations into its own payouts.
Dalziel said any profit made by the Government on a red zone property would be "immoral".
Brownlee said the Crown would recover only the cost of the repair for the properties, which would generally be much less than the 2007 rateable value.
"The suggestion the Crown is making a financial windfall on these claims relative to what was paid homeowners is absolute rubbish," he said.
"If, hypothetically, there is a ‘profit' from any particular transaction - and we're not anticipating there will be - it will be absorbed."
Valuing all properties in the residential red zone was "impractical when the red zone offer was launched and was not being done now".
It would be "nice for people to know" what the final outcome was, but it was unfortunate the new valuations were not done at the outset, he said.Christchurch valuer Keith den Hallander said insurance companies had been getting their own valuations and if the Government did not do the same, it would be at a disadvantage when it came to negotiating payouts.