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Rates Postponement

This page answers commonly asked questions about the process for postponing rates on the grounds of hardship.

Policy adopted by Council

In September 2000 the Porirua City Council adopted a policy for the postponement of rates on the grounds of hardship. Applications from ratepayers meeting the eligibility criteria will be considered.

Who can apply for rates postponement on grounds of hardship?

You can apply for rates postponement on the grounds of hardship if:

• you are the owner of the property under which any application is made, and
• the property is your normal place of residence, and
• the property is used solely for residential purposes, and
• your equity in the property is not less than 75% of the rateable value of the property, and
• your only assets are the house in which you live, a car, and other assets to a value not in excess of $15,000.

Is there a maximum level of the applicant/s’ gross income above which rates will not be postponed?

Yes. Council has set a maximum gross annual income level of $14,800 above which abatement commences. This means that if your income exceeds this maximum income level you may still qualify for some assistance; however, the amount of rates that can be postponed reduces by $1 for every $8 of additional gross income over $14,800.

Are all the rates postponed?

No. The ratepayer is required to make a minimum contribution towards the rates on the property. The ratepayer is required to pay all of the Porirua City Council uniform annual charges, which include separate service charges for water, rubbish collection, and sewerage as applicable, and the General Service charge (refer the “Rates Description” section on the front of your rates notices). The ratepayer is also required to pay all of the Wellington Regional Council rates.

Is interest charged on the rates postponed?

Yes, interest will accrue on any postponed rates. The interest rate will be set at 1 July each year by Council based on the one-year fixed interest swap rate obtained from Council’s bankers plus 0.2%. Please contact Council for details of the interest rate applicable for the current rating year.

Interest will be charged on rates postponed from the date of the postponement. The interest charge will be calculated on 30 June each year using the rate set on 1 July of the previous year. The interest charge will compound annually, and will also be postponed.

Is there a limit to the total amount of rates postponed?

Yes, the total sum of rates postponed (including interest) is not to exceed the rateable land value of the property concerned.

For how long can rates be postponed?

For ratepayers over the age of 60, the postponement can be until the death of the occupier or until the occupier ceases to occupy the property, whichever is the earlier.

For ratepayers under the age of 60, the postponement can be for the lesser of the period until the death of the occupier, or until the occupier ceases to occupy the property, or for a period of five years.

However, each approval for postponement is valid for a period of one year only. Ratepayers must re-apply each year as their gross income and other details may change. Thus, a new application form, which includes a new voluntary declaration, is required to be completed if you wish to have a further year’s rates postponed.

Is the eligibility criterion subject to change?

Council reserves the right to review the eligibility criteria.

For example, Council will review the interest rate charged each year on rates postponed. Council will also review the maximum gross income level above which abatement commences to reflect annual percentage movements in the average weekly ordinary time wage as advised by Statistics New Zealand. Council will set both the interest rate and maximum gross income level applicable at 1 July each year.

Will Council require some form of security for rates postponed?

Yes, to protect Council’s security a charge will be registered against any property on which rates are postponed. This will ensure that the property cannot be sold without the rates postponed being repaid to Council. The charge will also alert any future purchaser or lender to the existence of the postponed rates.

Can I have rates postponed and still get a Rates Rebate from the Department of Internal Affairs?

Yes, but only on the rates that are not postponed.

The Rates Rebate scheme offered through the Department of Internal Affairs is an entirely separate assistance scheme. Its rules state that no rebate may be granted on postponed rates.

Should I seek independent advice before making an application for rates postponement?

Yes. Council strongly encourages every intending applicant to seek independent advice before making an application for rates postponement.

The application form requests the applicant/s to sign a voluntary declaration under the Oaths and Declarations Act. Each applicant should be aware of his/her responsibility for the accuracy of the information supplied to Council as part of the application. Council may request evidence of income details provided.

There are several organisations that can provide such independent advice:

What should I do now?

If you believe that you may be eligible for rates postponement on the grounds of hardship:

1. obtain an application form from the front desk of Council’s Administration Building in Cobham Court, Porirua City, or alternatively contact us and we will send a form out to you,
2. complete the application form in full, remembering to provide your gross income details for the preceding year to 31st March. You may need to contact Work and Income New Zealand or Inland Revenue to obtain such details as appropriate,
3. seek independent advice, and
4. send the application form to Council. Applications may be submitted anytime during the rating year. However, Council will only be able to process the application and calculate the amount of rates that may be postponed once it has set its rates for the year. Council usually sets its rates by the end of August each year, and details this in your rates notice for the 2nd instalment which is posted on or about 1st October each year.