Local Authorities Urged To Make Submissions On Crown Rating Exemptions In New Bill

Local Government Minister Sandra Lee today urged the Wellington City Council and other local authorities with concerns about Crown rating exemptions to make submissions on the new Local Government (Rating) Bill.

The Bill was introduced into Parliament this week and is expected to be referred for select committee consideration after its formal first reading next week.

Ms Lee said the Bill proposed to maintain existing rates exemptions for some categories of Crown land and for private land used by churches, charities and other community agencies.

The Bill proposes 21 broad categories of non-rateable land. One proposed category would include land forming part of a National Park, a reserve, a conservation area, and a wildlife management reserve, wildlife refuge, or wildlife sanctuary. Other Crown rating exemptions include schools and hospitals.

Another proposed category of non-rateable land would include land used solely or principally as a place of religious worship, or for a Sunday or Sabbath school or other form of religious education and not used for private pecuniary profit.

"This is a difficult issue but in the end the government decided that the costs and difficulties of removing these exemptions would be too great for the limited benefits that could be achieved," Ms Lee said.

"However the government does recognise that Crown rating exemptions impact very unevenly and heavily on some local authority districts, and my officials are undertaking further work on a method to address these cases."

Ms Lee also confirmed that property owners rather than long-term occupiers would generally become liable to pay rates under the new Bill.

"Modern rating practices have tended to drift away from the code that is expressly provided for in the current legislation, leading to uncertainty that has had to be resolved through litigation," Ms Lee said.

The move to owner liability will not only avoid this uncertainty but also ensure a more stable rating base that does not require local authorities to keep track of changes in tenancies," she said.
The Local Government (Rating) Bill recognises that some existing leases are based on tenants being liable for rates and that owners won't be able to recover extra costs from tenants until rents are next reviewed.

"A change such as this is a complex matter and the select committee may well identify refinements and adjustments to improve the process and ensure it operates smoothly and is fair to everyone," Ms Lee said.

Ends

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