Rates Payments and Calendar
Rates - first instalment deadline - COVID Alert Level 3 office closure
Council is aware that the deadline of for the first rates instalment, 7 September - is approaching. We are also conscious that many people come in to the office to pay rates. With our offices currently closed due to the COVID-19 lockdown, Council has resolved to delay applying the rates penalty for seven (7) working days after the offices open. At the time of writing we are expecting to open the offices on Wednesday 8 September if we move to Alert Level 2 (signaled by the Government). This would mean that the new deadline date for rates payment is Friday 17 September, 5pm. If rates remain unpaid at that time, the penalty will be applied. If the Alert Level situation changes, this will be revisited.
Rates invoices are produced on a quarterly basis and are due for payment on the following dates:
Covering the Financial Period 1 July 2021 to 30 June 2022.
|Instalment number - for the period||Invoice Date||Due Date|
|1 - July to September||1 August 2021||7 September 2021|
|2 - October to December||1 November 2021||7 December 2021|
|3 - January to March||1 February 2022||7 March 2022|
|4 - April to June||1 May 2022||7 June 2022|
It is entirely up to the individual how they pay their rates. Council offers a Direct Debit service with weekly, fortnightly, monthly, quarterly or annual options. Accepts automatic payments. Is registered with the banks for telephone and internet banking payments, or payments can be made at Council offices by cash, Visa or MasterCard. Payments can also be made by Credit Card through the Pay It portal on this website. (Service fees apply to payments by Credit Card)
Council charges penalties for unpaid rates in accordance with Sections 57 and 58 of the Local Government Rating Act 2002.
Objectives of the Rating System
The objective of the rating section is:
- To ensure that the cost of rates are spread as fairly and equitably as practical to provide sufficient revenue to cover operating and capital expenditure not covered by other sources of revenue.
- To ensure that policy complies with the relevant legislation.
In developing its Revenue and Financing Policy, Council made an assessment of the public good and private benefit generated by each service provided. Arising from this assessment, Council identified the portion of cost for each service to be funded from rates revenue.
In selecting a rate for each service funded wholly or partially by rates revenue, Council considered and sought to reflect the following principles:
- Council activities - incorporating the principles of community outcome, patterns of benefits in public goods/general equity, the beneficiary pays principle, inter-generational equity and the exacerbator paying for negative effects they cause.
- Funding sources for each activity - ensuring that, in addition to a community outcome, there is fairness and equity, significant adjustment difficulties are balanced and comply with Council policy and are in the best interests of ratepayers and residents.
- Funding system for Council - the aggregation of funding for each activity is modified to take community well being into account.
The Rating System
The legislation provides for different ways in which to levy a general rate. However, there is no legislation that directs Council to favour one method over another. The key is to select a method that is effective, efficient and transparent for the District in allocating the cost of the general rate. The options available are:
The Annual Value System requires valuations based on the rental value of property to be updated annually. This method is not considered suitable for a mixed rural/urban district. Auckland City Council uses this system.
The Land Value System is used by a number of local authorities. The cost of rates is based on the value of land without taking into account the value of any improvements. However, land value is somewhat notional as a large number of properties have been improved. Urban ratepayers expect to pay similar rates to their neighbours and, as such, land value rating is seen to be more fair and equitable than the capital value system. The opposing argument to this approach is that the activities funded from the general rate are principally public goods and, as such, Council is levying a tax, not pricing services. Land value rating penalises owners of vacant urban property and tends to shift the cost of the rates burden from urban property owners to rural landowners with much higher property values.
The Capital Value System is easy to understand, in that the total value placed on each property (land and improvements) is closer to the market value. As with the land value system, there are points for and against this system. There is the perception that the capital value system moves the rates burden from rural to urban property owners and, in addition, that it penalises commercial development, whether urban or rural.
In summary, anomalies will always be present, whatever system is used. The Capital Value System is the system currently in use in the South Waikato District. This system suits a mixed urban/rural district with a significant range of land values, better than the land value system.
Council tends to use targeted rates for services where there is a high level of public good and/or where it is difficult to identify benefiting individuals within the District.
Council uses targeted rates when it is appropriate to collect revenue from one or more groups of ratepayers who receive a specific localised benefit. The services to be funded by a targeted rate include:
On a Capital Value Basis:
- Stormwater services.
- Putāruru Business Promotion charge (50% of the total collected)
On a Uniform Basis:
- Additional Unit rate
- Hall Rates (within each hall rating area)
- Putāruru Ward Rate
- Putāruru Business Promotion charge (50% of the total collected)
- Solid Waste (Refuse) collection
- Tīrau Ward Rate
- Tokoroa Ward Rate
- Waste Water disposal
- Water supply
- Recycling Rate
- Clean Heat
Council has been able to operate a rating system that appears to meet the requirements of the revenue and financing principles outlined previously, without resorting to differential rating, and is of the view that that situation has not materially changed. For this reason, Council will not set rates differentially.
Capital expenditure is funded from rates revenue, reserve funds set aside for this purpose, loan finance and investment income. The specific source of funding for capital projects is contained within each year's adopted financial forecast in the Long Term Plan.