A group of Richmond residents are likely to receive rates relief in the next financial year, after facing massive rates increases when their land was rezoned.

But the conditions of that relief will only be decided after a public consultation period, starting next month.

Tasman district councillors agreed at a full council meeting in Richmond yesterday to start the consultation process on rates relief for 14 landowners in Headingly Lane and Lower Queen St. They were affected by rates increases of up to 270 per cent in 2011 after their land was rezoned from rural to commercial as part of the council's Richmond West Development project.

Councillors voted 9-2 to put two options - rates remission and rates deferment - out for consultation in the annual plan, which is due out on March 23.

A remission policy would result in the council waiving the higher rates, while a deferment would postpone the payment of the increased rates until a later date - for example, when the landowner sells the property.

Although councillors were unanimous that rates relief needed to be implemented for the next financial year, there was debate over the most suitable form of relief and its conditions.

Their main concern was that a remission policy would be too costly and could result in future "liability issues" for the council.

"It's a real balancing act," Tasman Mayor Richard Kempthorne said. "If we give rates remission, there are real liability issues that could affect the rest of the district.

"We could have the same situation with a much bigger rezoning, and that would have a much bigger impact on ratepayers."

Tasman District Council chief executive Lindsay McKenzie said in his report to the council that "we haven't specifically addressed the effect [of rates relief] on other ratepayers", although he stated that remission would mean "other ratepayers will meet the shortfall". The total annual rates increase for the Headingly Lane residents as a result of the rezoning was $40,000.

Deputy mayor Tim King said a remission policy would need a time line, because it could encourage landowners with historic rates increases as a result of rezoning to apply for backdated rates relief.

"This is a lot bigger than Headingly Lane, so we need to keep this in mind," Mr King said. "It needs to apply to the whole district, because once you provide relief to Headingly Lane, other residents can also expect relief."

Councillors Brian Ensor and Glenys Glover voted against putting a rates remission policy out for consultation, saying deferment was the only affordable option.

Some of the Headingly Lane residents spoke at the public forum before the meeting, and made it clear that they thought the rates increases were unjustified and that remission was their preferred option.

Colin Fraser said it was unfair for the council to charge commercial property rates from "day one of a 50-year development plan".

"All we want is a simple and clear rates remission."

Debbie Fitzpatrick asked how the council could justify the increase when residents were receiving the same services. She said Headingly Lane residents should not be paying commercial rates when they did not have footpaths, sewerage or stormwater services.

"We are being charged business rates on a grazing paddock."

Although the Headingly Lane rates dispute has lasted over a year, councillor Judene Edgar said the council was determined to resolve the issue. She was adamant that both options needed to go out for consultation so that "we can hear the full range of views".

"We need this signed off by June 30 so it will apply for the next rating year. That is a key consideration."

- © Fairfax NZ News

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