The Whakatāne District Council is planning a more 'proactive approach” to overdue rates payments.

Council finance general manager Helen Barnes says at the end of March, rates arrears totalled more than $4.4 million (including rates collected on behalf of the Bay of Plenty Regional Council), of which $1.7 million relates to the current year.

‘Aged rates arrears' – payments overdue by one, two or three or more years – make up the $2.7 million arrears balance.

'Rates arrears impose a significant cost on all ratepayers because, in the short-term, the shortfall has to be covered by interest-bearing bank funding and in the longer term, by increasing rates across the District.

'Either way, that's not a good outcome and it's not fair on the people who pay their rates on time, all of the time.”

Helen says the Council is committing extra resources to ensure as much of the rates arrears as possible are paid in full, or arrangements are made for payment over a period of time.

'We'll be contacting property owners with rates arrears to talk through their situations and the consequences of continued non-payment.

'These include forced rating sales, or where a bank, building society or other financial institution holds a mortgage over a property, levying rates demands on the first mortgagee.”
She says there's a simple way to avoid that situation and that's to contact rates staff and set up an arrangement for arrears to be paid in a managed fashion.

Any freehold property (other than Māori freehold land) can be subject to a court ordered rating sale and the Council is currently pursuing a number of such sales processes, which would see the purchasers take responsibility for future rates payments.

Levying rates demands on mortgagees requires the lender to pay the arrears and penalties due, with the cost being added to the owner's mortgage.

'The last thing we want is to see someone's property put up for sale because of unpaid rates,” says Helen.

'So the message to anyone struggling to keep up with their rates payments is to come and talk to us so that we can find a way of addressing the issue.

'And if late payment penalties are part of the problem, we can look at that situation too. Penalties can be waived under some circumstances and where a property owner is clearly trying to get on top of their arrears, we'll be taking a sympathetic approach.”

Currently, more than 20 per cent of rates are paid by direct debits, which see payments made automatically from a property owners' bank account, ensuring that late payments and penalties don't become an issue.

Helen says many people have opted to make monthly direct debits so that payments can be split into more manageable amounts.