Many Aucklanders are facing immediate financial stress and an uncertain future.
We are providing short-term assistance by allowing ratepayers to delay their fourth quarter rates instalment until 31 August 2020. However, this only provides a temporary solution.
In addition to this short-term assistance, we recognise that some ratepayers will continue to need support when the first rates payment for the 2020/2021 financial year is due.
What we are proposing
We are proposing to allow ratepayers financially impacted by COVID-19 to put off paying up to $20,000 of their 2020/2021 rates per property until 30 June 2021 and give a further 12 months to pay off the balance. You will also be able to carry forward up to $5000 of any rates deferred from your fourth quarter instalment.
The postponement will be available to all ratepayers (except government organisations and utility companies) who are in financial hardship as a result of COVID-19 and who meet the criteria and conditions set out in the proposed scheme.
For most ratepayers, rates are not a major expense (as compared with mortgages, for example). A rates postponement, while small compared to the government’s support, does provide some additional financial relief to those facing financial hardship.
Some larger businesses, with rates over $20,000, are severely affected by COVID-19 but are often better able to manage through financial hardship. We could allow businesses to apply to postpone their rates in excess of $20,000 but this would add to the overall cost of the scheme.
Under the proposal, we would accept applications up until 31 December 2020. Eligibility will be limited to ratepayers who owned their property before 26 March 2020 when we went into Alert Level 4.
We will add a postponement fee to rates postponed under this scheme to cover interest and administration costs.
Effects of the new rates postponement scheme
- enables us to help ratepayers who are facing financial hardship as a result of COVID-19
- focuses support on residential ratepayers and small to medium businesses
- provides for ratepayers enrolled to cover the cost of borrowing and administration through a fee added to the postponed rates
- reduces the amount of rates we expect to collect next year by $65 million (but could be as high as $85 million) meaning we will have less to spend on activities and projects until we receive the postponed rates.
What happens if we don’t introduce a rates postponement scheme
This would mean that:
- we wouldn’t be able to provide rates postponement to ratepayers affected by COVID-19
- this option does not reduce council’s ability to invest in activities and projects that can help economic recovery.