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More than $500K owed to our councils

More than half a million dollars in rates arrears from previous financial years is owed to Wairarapa councils.

And legal action is underway for more than a dozen properties to recover the owed amounts.

In Masterton, arrears from previous financial years totalled $341k at the end of 2023.

The total balance of unpaid rates was $1.34 million – 28 per cent more than the same quarter end last year.

Some of the arrears for this financial year can be attributed to people making direct debit payments.

At a recent Audit and Risk Committee meeting, Masterton District Council [MDC] finance manager David Paris said the arrears increase compared to last year is “noticeable but not significant”.

He said the council is having good success with recovering arrears via contacting mortgagees and “asking the banks to pay those arrears”.

“But we also have some people who don’t have mortgages, and we have to take legal action with those properties to recover rates.”

Paris said there is “ongoing legal action” with seven Masterton properties.

Audit and Risk Committee chair Philip Jones asked Paris if the council is expecting an increase in “back debt”, to which Paris said, “No, rates are always collectable”.

“Writing off rates is not something councils do because we can collect rates by enforcing the Local Government Rating Act.

“We can sell properties. The process to get to that point involves legal steps and, usually, someone comes to the party to help out, or they find somebody who can help them with the rates payment.

“We haven’t ever put someone on the streets, but they do realise that they can’t avoid paying rates. It’s a requirement of owning a property.”

Masterton councillor David Holmes voiced his concern for property owners who owe rates – particularly those living rurally.

“I would say that our concerns about arrears and rates at the moment are nothing compared to what they might be in six months’ time,” he said.

In South Wairarapa, legal action is also underway with some property owners, as of the end of December.

A recent report to the council’s Assurance, Risk, and Finance Committee stated mortgagee final demands for eight rating units were sent at the end of November, and legal notifications were sent in August — “12 new for 2022/23 rates arrears”.

There are 24 repayment plans in place as of December 2023, compared to 18 the year prior.

The total amount of outstanding rates in South Wairarapa was $756k as of December.

Of this, $94k was arrears from previous years.

Of the total amount of outstanding rates, $321k are from rural properties, $157k are from Featherston, $144k are from Martinborough, and $132k are from Greytown.

Similarly to Masterton, direct debit payments have an impact on the amount owing in the current financial year.

Carterton District Council does not include a detailed rates arrears breakdown in committee reports but a spokesperson said the total outstanding rates are $1.095m, with $98,667 owed from previous financial years.

-NZLDR

LDR is local body
journalism co-funded
by RNZ and NZ On Air.

2 COMMENTS

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Emily Ireland
Emily Ireland
Emily Ireland is Wairarapa’s Local Democracy Reporter, a Public Interest Journalism role funded through NZ On Air. Emily has worked at the Wairarapa Times-Age for seven years and has a keen interest in council decision-making and transparency.

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