Data provided to The Star from the city council under the Local Government Official Information and Meetings Act shows spending on the scheme has increased from $6.1m to $9.5m annually compared to 2021.
The rates rebate scheme is administered by the city council but entirely funded by the Government through the Department of Internal Affairs.
Ratepayers can apply for a rebate for their residential property, essentially a reduction, if they live at the home as their usual place of residence and meet certain income thresholds.
The number of properties with a rebate increased from 9719 to 12,056 between the end of 2021 and December last year.
However, part of the increase is due to changes to the scheme.
The Government loosened the requirements to qualify for a rates rebate in July last year, with SuperGold cardholders benefiting from a higher income threshold of $45,000, up from $31,510.
Taxpayers’ Union spokesperson Tory Relf said the figures highlight what she sees as a growing problem of council costs being quietly shifted onto taxpayers.
“Over the last three years, rates increased by an average of 24.24% in Christchurch, yet inflation over the same period was 13.7%. The actual solution to this is a rates cap, not papering over the solution with further subsidies,” she said.
“When thousands of properties are falling behind on rates and more households need rebates just to cope, that’s a flashing warning light that council spending is out of control.”
The amount of unpaid rates owed to the city council has also increased, rising by $4.7m – or 48% – from $9.7m at the end of 2021 to $14.4m as of this month.
This figure covers all properties that have not paid their rates for 90 days or more.
However, the number of properties in arrears has remained relatively stable, with 7372 in 2022 and 7180 at the end of last year.
This is because as rates increase, the total dollar amount owed rises even if the number of properties in debt stays similar.
As a percentage of the total rates levied for the city, the amount of properties in debt has remained stable at 1.38% in 2021 compared to 1.42% at the end of last year.
A 7.96% rates increase has been proposed in this year’s draft Annual Plan which is currently out for public consultation until next Friday.
The city council says it spends about $350,000 a year enforcing rates payments, but could not provide precise costs to The Star because the budget is not separated from the general administration of rates.
Last year there were just three council-initiated court actions over unpaid rates – one successful and two still ongoing.
More commonly, the council relies on other enforcement methods. Last year it issued 5958 14-day late notice letters and referred 253 cases to debt collection services.
Another common way to recover unpaid rates is to make a formal demand to a property’s mortgagee, usually a bank, which is legally required to pay the outstanding amount.
These demand letters were sent 1725 times last year.
Once a bank pays the rates, it typically recovers the money from the ratepayer by adding the amount to their mortgage account.
Currently, the highest unpaid residential rates bill is $187,000 and more than a year overdue. Other properties owed $157,200 and $96,400.
