Western Bay of Plenty council owed $6.5 million in unpaid rates for past financial year

There were 1028 unpaid rates accounts in Western Bay for the past financial year. Photo / George Novak

Western Bay ratepayers owed the district council more than $6.5 million in unpaid rates, as of the end of the financial year.

In a letter to the editor, secretary of the Katikati Waihi Beach Residents and Ratepayers' Association Keith Hay said Western Bay council should try to recover the millions of dollars in overdue rates.

This comes after the council strengthened efforts to pursue more than $80,000 owing to them from people refusing to pay rent for using council land.

Hay said reclaiming unpaid rates would be a "much more rewarding exercise than trying to recover a mere $80,000".

It would also mean the council would not need to impose an 11.5 per cent rates increase this year, he said.

Western Bay's group manager of finance and technology services Kumaren Perumal said the council followed best practice to collect unpaid rates, however, issues surrounding the rating of Māori land meant the overall overdue amount remained higher than was likely to be collected.

"This issue is common across local authorities in New Zealand."

Perumal said a "significant proportion" of unpaid rates related to Māori freehold land.

This included land that had no title, was unoccupied or where the council had difficulty contacting the multiple owners of the land in question, he said.

"While council engages a debt agency to recover unpaid rates where it is able, the legal and practical options for recovering rates on Māori freehold land are far fewer," he said.

The largest outstanding rates bill in the Western Bay as at June 30, 2021 was $313,511.36. Photo / George Novak

Perumal said the $6.5m amount owed as of June 30, 2021 could be separated into two categories: general rates debt ($1.5m) and Māori land rates debt ($4.9m). Both figures included penalties.

The vast majority of the general rates debt was current debt and the council had processes in place to recover the outstanding rates and negotiate a suitable payment arrangement with the ratepayer, Perumal said.

The last option was pursuing "debt recovery" options, including using debt agencies.

For rates debt on Māori land, the council had "far fewer" options to collect this debt because of the complexity of Māori land, Perumal said.

Perumal said central government had recognised the rating of Māori land was a significant issue for Māori landowners and for councils.

In response, the Local Government (Rating of Whenua Maori) Amendment Act was introduced, which addressed some of the inequities resulting from current practices and legislation.

The Bill provided local authorities with the power to write off rates arrears on any land where they could not be recovered, or in the case of Māori land, a person had effectively inherited rates arrears from a deceased owner.

This was among several other proposals to modernise the rating legislation which applied to Māori freehold land.

The key changes came into force on July 1, 2021.

There were 1248 unpaid rates accounts (residential and commercial) in Tauranga for the past financial year. Photo / George Novak

Tauranga City Council's manager of transactional services Jim Taylor said about $1.7m was owed in unpaid residential and commercial rates. This figure included rates the council collected on behalf of the Bay of Plenty Regional Council.

"This is an improvement on the previous financial year," he said.

"We have found that the different payment arrangements we offer encourage ratepayers to pay their rates."

Taylor said staff could always assist ratepayers in making a payment arrangement or catching up on rates arrears.

"We understand that there are times when ratepayers need assistance and more time to pay.

"Ratepayers on low or fixed incomes may be entitled to financial assistance through the Government's rates rebate scheme. The income limit for receiving a rebate is on the front of each rates invoice."

The council had obtained one court order for a rating sale to recoup the rates in full, which was the first time it had done so.

"We have postponed doing this for six months, in a last attempt to work with the owner to find an alternative to selling the property to recover rates," Taylor said.

Information from the Bay of Plenty Regional Council said there was $3.6 million in rates owed to the council by ratepayers for the past financial year.