Auckland Council is refunding Kāinga Ora almost half a million dollars after a Herald investigation revealed a “data entry” error affecting three units in Papatoetoe.
Property rates of more than $150,000 per year were set for two of the Kāinga Ora units on Swaffield Rd, one valued at $700,000 and the other at $550,000. The properties are part of a multi-unit building where other units had rates of about $2000.
The council said the error was “data entry issue, not a system issue”.
Neither Auckland Council nor Kāinga Ora had noticed the error, which had been in place since July 1, 2022, resulting in the public housing agency paying $442,513.61 extra in rates for the properties.
The error was only identified after the Herald questioned why the rates were set at 22 per cent and 28 per cent of the properties’ values. After looking into the issue, the council also identified a third Kāinga Ora property with an incorrect rates assessment.
Auckland Council’s head of rates valuations and data management, Rhonwen Heath, said the council had not had this type of error before and “of course we will look into ensuring that it is not repeated”.
“This was not a fault related specifically to Kāinga Ora or large landlord and was not a system issue that would affect their other properties.”
What the agency was overcharged is only a small fraction of their overall annual rates bill. Auckland Council told the Herald Kāinga Ora’s annual rates figure for 2023/2024 was around $81,924,000.
The requirement to pay rates is not specific to certain Crown agencies, but depends on how the land is being utilised. Certain uses allow the Crown to be excluded from paying rates.
Kāinga Ora general manager of strategy, finance and policy, Gareth Stiven, noted the agency has over 31,000 homes in the Auckland region and rates invoices are received from council for each of these properties through a bulk invoice each quarter.
“Our automated rates payment system verifies these bulk files to determine that the properties are owned by Kāinga Ora. The rates overcharges have been addressed by Auckland Council and they are refunding the overpayments. We believe this rates error charge is an isolated one,” Stiven said.
“Across our whole portfolio we don’t check each rate charge, but we do a sense check on the total amounts. Across our 72,000 homes this averages approximately $2460 per property. This is in line with expectations, based on average rates across New Zealand.”
Stiven said Kāinga Ora was reviewing rates charges for Auckland and other territorial authorities to ensure the invoices were correct.
Earlier this year, Auckland Council put rates up by 7.7 per cent along with a 9.5 per cent hike in water bills, which took the combined cost for the average household to $4900 during a cost of living crisis.
In late November, Auckland Mayor Wayne Brown signalled more rates rises in the coming years, as part of his proposed 10-year plan.
Most alarming to Aucklanders will be the mayor’s assurance that rates will have to increase in the short term.
“Despite a reduction in operating costs, rates will need to increase as Auckland Council plays ‘catch-up’ on previous decisions to plug operating gaps using short-term measures,” a statement from the mayor’s office said at the time.