The Tararua District Council is making progress in collecting rates arrears, councillors have been told.

"We have lower total rates arrears compared to last year, which is what we like to see," council's finance manager Cameron McKay said.

Abandoned land and long term, outstanding debts are going through the judicial process and councillor Andy Thompson said council would expect to see a reasonable drop in the amount owing in the third financial quarter.

Mr McKay agreed, but said there were a number of legal steps which council had to go through first.

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While the total arrears at June 30 was $937,993, there are also current rates and penalties owing, bringing the brought forward balance to $1,763,740, owed by 1637 debtors at July 1.

"We have collected $295,091 of the arrears to September 30," Mr McKay said.

Of the remaining rating units with arrears, 41 owe $865,000, 60 per cent of the total remaining arrears. This is made up of mainly the abandoned land and outstanding rates going through the legal process.

However, council revenue manager Eleanor Roberts warned if the sale price did not meet the debt, including legal costs, the debt could come back to council to be written off.

Mr McKay said by going through the legal process, hopefully council may be able to keep rates arrears under control.

"In the last two weeks we've received a $15,000 payment from long term debt. We are making some headway."