Unpaid rates not a major problem for councils

LAUREN HAYES
Last updated 05:00 29/01/2013

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Southland councils say they are unconcerned about levels of unpaid rates in the region, as they start processes to recoup funds by selling privately-owned properties.

Southland District Council has publicly notified that 12 properties would be sold in late February if rates owed on them were not paid.

Most were in the Ohai/Nightcaps area.

Southland District Council transactional accountant Jamie Cunningham said selling off a ratepayer's property to cover outstanding rates was a last resort.

"We don't like doing it. At the end of the day we'd rather people just paid their rates."

Despite the cluster of properties in one area, he did not believe the list was the beginning of a trend, or a sign unpaid rates were increasing, as the council waited to list properties until there were enough to make the process economic.

By law, properties can only be sold if at least three years' worth of rates are unpaid. The council then has to give notice of its intention to sell the properties to recoup the value of the unpaid rates.

Mostly this resulted in the property being sold, although sometimes owners would notice their property listed and contact the council about the rates owing, Mr Cunningham said.

Together, the 12 properties had a capital value of $395,500, with the cheapest, a property in Tuatapere, valued at $400 and the most expensive $69,000. The council could not disclose the amount of rates owing on the properties.

Invercargill City Council director of finance and corporate services Dean Johnston said despite the poor economic climate unpaid rates were not a problem for the city council.

"Times are getting tougher out there, but we're not noticing a great increase of unpaid rates."

The city council had only one property on sale to recover unpaid rates, and it was the first in the city for several years, he said.

He believed this was largely thanks to the efforts of banks - as long as owners had a mortgage on the property, banks would continue paying rates, he said.

Gore District Council general manager of corporate services Russell Duffy said he believed levels of rate-paying had increased in the Gore district during the past three years.

The council had started legal processes to sell two properties in the district because of unpaid rates, but there had been very few sold off in the past few years, he said.

"It's not our desire to sell a property owner's asset. But we have to be fair to our other ratepayers as well."

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- © Fairfax NZ News

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