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The Warm Dunedin programme ties in with the Energy Efficiency and Conservation Authority Warm Up New Zealand: Heat Smart programme, which offers funding to occupants for insulation.
The council has established a targeted rate which allows eligible residents to install insulation and/or heating in their homes and pay it off over a decade.
Between 600 and 1000 homes were expected to be included in the trial, an initiative Dunedin Mayor Dave Cull welcomed.
''Dunedin has many older, poorly insulated homes. This is a great initiative which we have been working on for a long time to improve the standard of living and health of our community,'' he said.
Ratepayers who met criteria could apply to the council for up to $5000 for insulation and heating, which would be paid off over a 10-year period through the targeted rate.
Only the 12 insulation and heating service providers registered with the council could be used through the programme, although ratepayers could choose which of those they contracted.
All work had to be completed by June 1.
To be eligible for the financial advance, people had to be ratepayers of a Dunedin city property built before the year 2000, be up to date with rates payments and have a good rates payment history, and agree to pay all rates by direct debit on an agreed basis (monthly, fortnightly or weekly) for the 10-year targeted rate period.
They also had to provide a quote for approved insulation and heating from a council-registered provider.
Application forms and further details about the programme are available on the council's website.