Mum hit by big Auckland rates bill now worries she could lose her home

Auckland Council has received 8886 objections to its rating valuation process and expects to take until the end of this year to work through them. Photo / 123rf

A single mum who suffered a panic attack when discovering her new Auckland Council rates bill now says she will be forced to sell her home as the cost of living crisis strikes more Kiwis.

The mum - who works as a high school teacher - told the Herald in August her council bill had not only jumped about $200 a quarter, but that she had also been hit with two bills back-to-back totalling almost $1400.

She ended up as one of about 65,000 ratepayers who failed to pay their first rates instalment by the August 31 deadline, while 7700 are also still disputing their new bills.

The mum rang the council's helpline to arrange a payment plan before asking her bank to add $5000 extra onto her home loan to cover costs, she said.

But having earlier sought relief from her bank, she is due next January to come off a special one-year period of paying interest-only on the loan.

When that happens, the jump in loan repayments combined with cost of living rises and loss of her side jobs means she will no longer be able to hang on, she said.

"I am going to have no choice but to put my house on the market," she said.

And she isn't alone in battling council rate increases at a time when everything from food prices to home loan interest rates were also rising.

Rising inflation is leading economists to predict further bank interest rate rises. Photo / 123rf

Bruce Patten - a mortgage broker with Loan Market - said the latest predictions are for major bank interest rates to potentially climb to 6.5 per cent or even knock on the door of 7 per cent.

That could equate to the typical homeowner in Auckland paying $26,000 more per year on their mortgage or $500 per week, Patten said.

Auckland Council rates bills have also gone up for most city homeowners.

Council recently calculated new values - known as Capital Values - for each of the about 512,000 residential properties in the region.

These CVs were then used to help calculate new rates bills that were sent to homeowners in August.

That led to an estimated 380,833 homeowners facing higher rates bills and 130,995 facing smaller bills, the council's manager of financial policy, Andrew Duncan, said.

Some owners faced bills up to 30 per cent higher, but Duncan said most - or 237,772 - faced an increase of less than 10 per cent.

The new bills can be paid in full for the year, fortnightly or in four spaced-out instalments.

The council expects to earn about $653,653,952 from the second instalment payment due on November 30.

Auckland ratepayers have complained of new bills up to 30 per cent higher than last year. Photo / Peter Meecham

It also estimates there is up to $54 million still owing from the first August 31 instalment after 65,217 ratepayers or about 11 per cent of accounts missed the deadline - although the council said this is fewer people than missed their payments at the same time last year.

The outstanding amount includes penalty charges.

But head of rates valuations Rhonwen Heath said the council removes penalty charges if ratepayers agree to a payment plan and successfully pay their entire yearly bill by the end of that rating year.

She said the council understood Aucklanders may be feeling concerned with the added pressure of rates charges, but urged those who were worried to call and discuss options, such as "rates postponement and flexible payment".

Property rates make up about 40 per cent of the council's funding and helps it "provide the things that make Auckland a great place to live and work", Heath said.

That equated to about $2 billion to help run services like rubbish collection, libraries, park maintenance, events and improving public transport, she said.

Heath also said the council expects to take until the end of this year to work its way through the 8886 homeowners, who objected to their home's new capital values.

She said 1168 objections or 13 per cent have been resolved, while 87 per cent remain unresolved.

The objections included about 3178 ratepayers claiming their homes had been valued too high and 3913 saying their homes are valued too low.

Auckland Council has received 8886 objections to its rating valuation process and expects to take until the end of this year to work through them. Photo / 123rf

The single mum, meanwhile, said her rates bill jumped substantially after her council CV also rose from under $900,000 to $1.1m.

She said she paid $850,000 for her Kelston home in West Auckland in 2019.

Having saved since 2004, she was able put down a $250,000 deposit and take out a $600,000 bank loan.

She said she was proud of how far she'd come.

Migrating from India and working odd jobs, she then studied teaching here.

While working as a teacher, she'd previously made a good second income by taking on tutoring jobs, she said.

Her mum had also been living with her and given a part of her pension payments towards the home loan repayments.

However, tragedy struck when her mother recently died, while her tutoring jobs had also dropped right off since the start of the Covid pandemic.

The loss of secondary income and with no substantial teacher's pay rises in-sight, means the mum plans to sell in January and then rent for a year so her daughter can finish her high school studies with a friend.

Then she plans to move to Australia where she hopes she might get a salary up to $20,000 higher.

She said she can't help but feel bitter that having worked so hard to get a home, she is now likely to lose it because it's close to impossible to own a house in Auckland as a single parent on a teacher or police officer's wage.

"My daughter always keeps telling me, 'Mum, you are so educated, why did you pick this profession'," she said.