Pensioner unable to afford 85pc council rates hike

RISING THREAT: Neil Holderness and his late wife Diana chose their Kennedy Rd property 10 minutes after viewing it.PHOTO/ PAUL TAYLOR

A pensioner is about to be hit with an 85 per cent increase in land rates on the leasehold property he has lived at for 11 years.

Neil Holderness, 79, has battled lung cancer, a stroke, and is now fighting Hawke's Bay Regional Council (HBRC) to stay at his Kennedy Rd home.

"The regional council say they're looking after the lessees but that's rubbish. They're only looking after themselves - if you can't pay, they'll take the property off you."

From February 1, Mr Holderness' land rates will jump to $7920 per year - $6770 more than he had paid in land rates for the past 11 years.

This increase "reflected the market value of the leasehold property", which was $39,000 in April 2004 and was now $132,000. The annual rate Mr Holderness had paid was 5 per cent of the land valuation, which would increase to 6 per cent next year.

Mr Holderness said he didn't believe his two-bedroom house or the 404sq/m property it stood on were worth $132,000.

"I want fairness, which is not what we're getting."

Mr Holderness is not alone, with Labour MP Stuart Nash saying there was a large group of Napier Citizens who were facing financial hardship or the prospect of it due to land rate increase. "In the next 12-18 months a number of these leases will be re-negotiated and there will be a whole lot of people who can't afford it," he said.

Mr Nash said there were few options for leaseholders who could not afford to pay this increase: to buy out the lease, apply for hardship, or be bankrupted.

"The council run a very serious risk of forcing a number of people out of their homes."

"It should be remembered they're not houses, they're people's homes, and they are suddenly going to be ripped out from underneath them."

HBRC Financial Accountant Trudy Kilkolly said the rental was set 21 years ago at the land value at that time.

"As it is due to be renewed the percentage rate to be applied to valuation is the same but the land value, driven by market forces, has risen over the past 21 years."

Ms Kilkolly said all leaseholders knew the facts about the expiry of their lease and would be informed one-two years before this time about it.

HBRC also offered a 'deferred rental', and some leaseholders were choosing the option of free-holding their properties. There had been 19 sold in the past four months, with six currently in process.

For Mr Holderness, he had no idea how he would pay the $6770 increase though he had been looking at his options.

He retired in 2004 and lives off a superannuation, which includes a disability allowance, which is not enough to pay the increase, or buy out the lease.

In 2012 he applied for a loan from Manchester Unity, HBRC's lender of choice. They turned him down on the grounds he did not have an income and half the property was in his late wife's estate.

Mr Holderness said his only option now was to apply for an accommodation allowance through the Ministry of Social Development. He couldn't see any other way: "I'll take it - I want to stay here."

Mr Holderness and his wife Diana moved into the Kennedy Rd property in 2004.

Mrs Holderness did not know the property was a leasehold, and her husband said he did not have the heart to tell his dying wife the truth.

Mrs Holderness died 10 months after moving into the home in 2004, while Mr Holderness did not think he would live until the leasehold agreement was reviewed.

He was also angry with how the regional council had handled their leasehold portfolio.