Significantly more Auckland homeowners are putting off paying council rates as retirees with limited cash flow face tough financial times.

At the end of the most recent financial year, there were 648 residential properties in Auckland with postponements - up 65% from 392 five years ago.

It is a tiny proportion of Auckland’s 627,000 rateable properties.

However, even when population difference is considered, the number of postponements is far higher than in other large councils which have less than 10 each over the same period.

Rhonwen Heath, Auckland Council head of rates valuations and data, said councils have different criteria for postponing rates and alternative payment options.

“Auckland Council’s postponement policy is geared towards being an attainable solution for ratepayers – to apply, residential property owners need to have 80% equity in their property and live in the property.

“Our priority is keeping people in their homes and to work with them as much as possible, particularly in the current high cost of living environment.

There were 648 residential properties in Auckland with postponements at the end of the most recent financial year, up from 392 five years ago. Photo / Alex Burton

Heath said it was generally retirees, with substantial equity but limited access to cashflow for bills, who were postponing their rates.

“The postponement is an option that enables people to pay the rates when they can, however, interest does apply. Some customers opt to postpone only for a year, or even just part of their annual rates.”

Heath said postponements would naturally increase as Auckland’s population grew.

The council has also been promoting the scheme more widely, she said.

Citizens Advice Bureau national policy advisor Louise May said more older people were experiencing general financial stress.

Enquiries relating to Work and Income benefits, debt, repossession, emergency accommodation, food relief, and general financial difficulties increased by 12% in the year to June for clients aged 60 and above, May said.

The bureau also fielded many queries about help with rates rebates - a partial discount on rates for those on low incomes, she said.

“It is not uncommon for us to have people approaching us for help who are upset and worried because their rates rebate hasn’t yet shown up in their rates account – but then we discover this is because they have only just made their application for the rebate, and it is too soon for it to have appeared in their account.

“They are so anxious about their finances that they have been closely monitoring their rates account as soon as they make their application, hoping to see immediate relief.”

Wellington City Council has only granted four rates postponements over the past five financial years.

Council chief financial officer Andrea Reeves said postponements were seen as a last resort after all other avenues were exhausted.

“Ratepayers are also often hesitant to enter into formal postponements as the measure restricts their ability to seek additional financing using their property.

“Instead, we have found that many residents prefer flexible support options like payment plans, which allow them to manage arrears without the added obligations associated with postponements.”

Wellington City’s effective 18.5% rates increase, including the new sludge levy, took effect in July.

Since then, there has been an increase in demand for payment plans and rebates, Reeves said.

The council established more than 600 payment plans between July and October 2024 compared with 200 over the same period in 2023.

There were also 1153 rates rebate applications processed, up from 831.

Wellington City Council chief financial officer Andrea Reeves said postponements were seen as a last resort in Wellington.

Christchurch City Council received nine applications over the same time period.

Head of finance Russell Holden said the council has not experienced a significant increase in demand for other rates relief options like rebates.

Holden said the council empathised with ratepayers.

“We recommend people apply for a rates rebate (if applicable), talk with their bank about their mortgage, and take advantage of budgeting advice provided for free by several community organisations.

“We offer a penalty remission when a ratepayer is late with a payment but then brings their account up to date. For ratepayers who have fallen behind with their rates, we offer payment arrangements to allow them to pay off the arrears over time without incurring late payment penalties.”

Tauranga City Council only received two applications to postpone rates in the past five years and the one that was made on financial hardship grounds was declined.

Rating policy and revenue manager Jim Taylor said the council’s postponement criteria included the condition that applicants couldn’t access financial assistance from the private sector.

“One explanation for low postponement rates in Tauranga may be that residents are utilising the private sector to release equity that can be used to pay their rates.”

The council was happy to work with people on payment plans for their rates and encouraged those who were eligible to apply for a rates rebate, Taylor said.

Hamilton City Council has granted one rates postponement.

Former business services general manager David Bryant said rebates were available and the council recently introduced a new digital platform to make it easier for people to pay rates.

“We have been receiving great feedback about the flexibility we offer. We are finding ratepayers prefer the flexibility around payments that our system provides.”

Dunedin City Council hasn’t had any applications for rates postponement and only a few applications for rates remissions over the past five years.

A council spokesperson said this could reflect ratepayers’ lack of awareness of the policies or because criteria excluded people who may have been keen to apply.

“The rising cost of living and other economic challenges are impacting households across Dunedin. In response, the Dunedin City Council actively supports the Department of Internal Affairs rates rebate scheme as an essential support for low-income ratepayers who qualify.

“Council staff regularly engage with ratepayers to assist with payment plans to spread rates costs more evenly over the rating year.”

- NZ Herald