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Good news – Rates Rebates have had a Re-think

Minister of Local Government, Hon Nanaia Mahuta announced that from 1 July 2018 eligible retirement village residents will be able to apply to their local council for a rates rebate. Rates rebates are an important part of the rating system which helps people on low and fixed incomes to better afford their annual rates.

Why village residents should receive rates rebates

The Rates Rebate Act was passed in 1973 to provide some financial relief to ratepayers who would be financially stretched by paying local government rates on their properties.

In 2007 the Report of the Local Government Rates Inquiry noted that the current rates rebate scheme had a number of exclusions and eligibility gaps that needed to be reviewed. The exclusion of retirement village residents was singled out as an example. The report recommended that residents be eligible for the rates rebate scheme. However, in order for this to happen, the Rates Rebate Act needs to be amended.

Not everyone agreed there was a case for change. Some officials have argued that retirement village residents are not ratepayers and are not liable for the village’s rates. They argue that licence to occupy agreements (LTOs) are not registered as separate rating units and therefore the resident cannot be eligible for a rates rebate. However, an occupational right agreement will require residents to pay their share of the costs of running the village, which will invariably include rates. The costs are charged to residents as part of a weekly or monthly fee. Further, councils are also increasingly charging rates across all units in a retirement village, rather than making one charge across the entire village, which suggests that councils see the individual dwellings in the village as rateable units.

The Retirement Villages Association (RVA) has long held that it is inconsistent to deny a rates rebate to an income-eligible LTO resident when their neighbour over the fence is entitled to receive it, only because retirement village living wasn’t envisaged when the legislation was drafted.

The change to the legislation was the result of years of lobbying from the Retirement Villages Association (RVA) and was championed by Hon Ruth Dyson, whose Rates Rebate (Retirement Village Residents) Amendment Bill was drawn from the ballot in May 2016. The National Party initially opposed the Bill, but came on board at the beginning of this year, once requested changes had been made to the Bill.

How to get a Rate Rebate:

The same income qualifications apply, as does the need to be resident in the village on 1 July.

  1. Residents need to complete the standard application form available from their local Council, just as they did when they owned their own home.
  2. The operator completes a certificate for each resident, stating that s/he was resident in the village on 1 July and the total of the rates s/he paid in a year. The DIA certificate explains how this will be calculated.
  3.  The resident pins the operator’s certificate to their application and hands it to the Council.
  4. The Council decides whether or not they qualify and if so, the amount of the rebate. The rebate varies according to the resident’s income and amount of the rates paid (see the table below).
  5. The resident can select to have the rebate paid directly into their account by Council, or to have it credited by the operator to them. The former is our preferred option and residents should be encouraged to choose it. The latter requires the Council to advise the operator of each resident’s rebate and the total rates bill is reduced accordingly.
  6. DIA advise that they will encourage Councils to visit villages and assist residents in completing their application.

Contact your local council for more information.

About Eve Williams

Eve Williams
Eve Williams is the Content Developer and Social Media Administration for Eldernet. She is currently studying towards her Masters at the University of Canterbury. She has a passion for learning new things.