In recent weeks Federated Farmers has been gathering information about rates on farms, part of our contribution to the current Productivity Commission review of local government financing.
A key theme in the feedback has been concerns that in many districts farming operations are paying numerous uniform annual charges, because the farm is in more than one land title.
Multiple titles are common in farming. This can be part of a farm succession plan, the use of leased blocks, and run-offs.
The basic rule is that rates apply to the capital or land value of each title, with a uniform annual charge to reflect a contribution all ratepayers should make regardless of property value.
To avoid one landowner paying multiple times, rating legislation allows for charges on additional titles to be remitted - but the rules are strict. The titles must be contiguous, used for the same purpose (i.e. farming), and owned by the same person.
Individual councils can extend these exceptions using a remission policy, so that for example land titles making up a farm don't need to be in the same ownership to qualify for remission.
In the rural Bay of Plenty, councils take a varied approach to this option.
Western Bay of Plenty District Council sticks to the legal minimum, allowing remission for titles leased by the same farmer but with no other exceptions. Not a lot of sympathy here it seems.
Whakatane District Council goes a little further for farming, with a policy designed for rates remission beyond the legal minimum.
Farmers here can potentially have charges remitted on contiguous blocks not in common ownership, as long as they don't have a house on them.
Opotiki District Council's policy is similar; if there are no houses, additional titles in a farm don't necessarily need to be owned by the same person to get a uniform charge remission.
A uniform annual charge can be hundreds of dollars. If you are farming more than one title and uniform charges are on each rate demand, it's worth checking with council whether you can have some of these charges remitted.
- Nigel Billings is a senior policy advisor for Federated Farmers