Whanganui District Council says $100,000-plus rates remission bill needs loan funding; services not affected

Aramoho property owners are among those facing significant rates increases. Photo / Bevan Conley

Whanganui District Council’s one-off rates remission scheme could cost more than $100,000 but chief executive David Langford says it’s something “we have to do”.

No council services would be affected, he said.

The council has signed off a one-off rebate of up to $500 for the 2023/24 rating year for property owners who meet certain criteria and face a rates rise of more than $700.

However, the council only has a budget of $20,000 for it and anything above this amount will be financed through loans.

Langford said it wasn’t a legal requirement to offer the remission and it was an addition to the normal rates rebate scheme available to low-income earners.

As far as he was aware, Whanganui was the only council in the country offering this kind of remission, he said.

“It is very doable.

“Ultimately, we still have to collect rates to deliver services and pay for these things, so it’s also part of our community coming together and looking after those people most impacted by the revaluations that can least afford it.”

Revaluation refers to Whanganui property valuations completed last year which reflected a property’s likely selling price on October 1, 2022.

There were massive increases in land values in Aramoho, Castlecliff and Gonville.

According to a report from chief financial officer Mike Fermor, it was estimated around 956 residential property owners would have a rates increase above $700, with 156 of these being more than $1200.

Of the 156 properties, 111 are estimated to have a rates increase of $1400 and above per year.

Those with an increase of between $700 and $1200 will receive a remission in the range of $1 to $500 if they meet the eligibility criteria.

If an eligible ratepayer has an increase of more than $1200, they will receive a flat $500 rebate.

The property needs to be residential and the ratepayer must live in the property. They may not own other properties.

Councillors Charlie Anderson and Rob Vinsen objected to that requirement at a recent council meeting, with Anderson saying rates remissions to landlords would ultimately benefit tenants.

Mike Fermor says the remission will give property owners time to think about options. Photo / Bevan Conley

Fermor said he was conscious council staff would face an “avalanche” of inquiries from people under financial stress.

“This is one option where we can provide a limited but very quick one-off relief if they meet criteria.”

The initiative was only for the next financial year, he said.

“We recommend [to] leave it for year one.

“It gives the property owner a year to think about options.

“The rating system is working well here, it’s doing what it’s designed to do. Whether it’s a good system is another thing.”

The estimated cost for remissions - $110,338 - was “almost certainly at the high end”, Fermor’s report said.

However, the council had a budget of only $20,000.

“Any remissions granted above this amount will be financed through loans.

“To mitigate and manage the risk, progress reports can be provided to council on how many remissions have been granted.”

Councillor Michael Law was the only councillor to vote against the plan.

He said people who were cash poor but asset rich could probably afford to pay their rates and the remission wouldn’t help those who needed relief the most.

Law suggested allowing rental tenants to apply for the rebate on behalf of the owners.

“Therefore, we’re now helping people who do need the help - the working people who have had their rent raised by $10 a week,” he said.

“It’s not ratepayers, it’s residents. How can we help our residents?”

Speaking to the Chronicle, Langford said Law raised some good points.

“Landlords will pass on the rates costs through the rents to their tenants.

“We do need to keep our minds open to how we can support those people, not just the people that own the houses they live in.”

It was up to elected members whether the initiative would continue in the future, he said.

“It was specifically around the revaluation and that only happens once every three years.

“Hopefully we don’t get these kinds of rates shocks going forward.”

Councillor Kate Joblin said being nimble was something bureaucracies weren’t good at sometimes, and she was thankful to council officers for enabling the plan.

“An initiative like this will never be perfect and it won’t deal with everything, but I think it will be good enough to do most of the job.”

Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.