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Feedback sought on proposed rates remission

Media Release

Release date: Wednesday 11 September, 2013
www.gdc.govt.nz

Feedback sought on proposed rates remission


A rates remission to address large rate increases that a small number of properties are facing has been adopted for consultation by Gisborne District Council. The increases have been caused by changes to three targeted rates - pests and plants, rural fire and soil conservation.

Feedback on the proposed rates remission is welcome. Full details and a submission form will be available on Council’s website from Monday 16 September. Submissions close on Wednesday 16 October, 2013. Anyone with questions about the remission can come along to a Rates Clinic on Thursdays between 1pm and 3pm at Fitzherbert Street to speak with rates staff.

Owners of affected properties will receive a copy of the proposed remission and a submission form. They should continue to pay rates at the same level as they paid last year until a final decision is made. This is likely to be by the end of this year. These property owners should let Council’s Customer Services know that this is their intention, even if they pay by direct debit. No penalties will be charged but all outstanding rates will have to be paid before 30 June 2014.

The same three targeted rates also caused large swings last year when the rating base was changed to land area. This year the rating base was changed to land value to fix the previous problem and so the properties affected are different.

Properties with smaller land area, but higher land values when compared to like properties in the same DRA (differential rating area), are most affected, says Council chief executive Judy Campbell. “The large increases in these three rates are concentrated in Tolaga Bay and Tokomaru Bay. We estimate that about 600 properties may qualify if the remission is adopted.”

“Last year properties with large land areas on the edge of the city and lower value properties with large land areas experienced rate increases due to changes in these three rates.”

Affected property owners brought the issue to Council’s attention just prior to the adoption of the 2013/14 Annual Plan, “It was too late to make changes at that stage and so putting a remission in place is the proposed solution.”

If adopted, the remission policy would automatically apply to those properties with an increase of more than 30%, and $100 on each of the rates for - pests and plants, rural fire and soil conservation. The remission would only apply to individual properties that have had an overall rate increase of more than 6% (after any other remissions) and where the remissions total $25 or more.

“This is a short term fix,” says Mrs Campbell. “We need to find a longer term solution. We have been working on a review of Council’s Revenue & Financing policy with the help of PWC. The aim of the review is to make Council’s rating policies easier to understand and easier to predict the effects of any changes made. This should help avoid large unexpected swings – up and down - to individual property owner’s annual rates.”

“Council rates have become more targeted and more complicated over time. Modelling is not picking up the true impact of some changes to how we rate.”

ENDS

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