Postpone or defer paying your rates
If you own your own home, many councils let you postpone or defer paying your rates. Check with your council to find out if they offer this service and whether you qualify for the scheme in your area.
Check with your council to find out:
- how to apply
- what it costs
- what you have to do about insurance and maintenance
- if you have to postpone paying all your rates or if you can choose to postpone only part of them.
Many people get independent financial advice before they postpone rates payments.
Who can apply
Each council makes its own policies for postponing rates payments. There are 2 main situations where they'll let you do this, but not all councils offer both.
- Your income is low and paying your rates would mean that you can't pay for your day-to-day needs, healthcare or urgent maintenance.
- You're over 65 (or 60 in some areas) and choose to let your rates payments come out of your estate after you die.
There are other situations where some councils let you postpone paying your rates. Examples include:
- You're under 65 and on a benefit from Work and Income.
- Your home is owned by a family trust.
- You live in a retirement village and the council can be paid back by the village's operator when your unit is sold.
- You pay rates on Māori freehold land or undeveloped Māori land.
- Your property has had a change of use, for example from farmland to residential, that means the rates have greatly increased.
How long you can put off paying your rates
You usually pay the rates you owe:
- when you sell your property
- if you stop living in the property, for example if you move into residential care
- when you die
- on a date that is agreed with your council, or
- when you decide to pay them — many councils will not charge a penalty when you pay the postponed rates back.
If your rates bill gets near the value of your property — many councils say 80% of the value — they usually stop letting you defer your rates. The action they take varies from one area to another, but you might have to sell your house to repay the rates.
How much it costs
Councils charge interest and other charges such as:
- set-up fees
- an annual administration fee
- an insurance charge — often called a reserve fund levy — to protect them from not recovering the rates debt if your house sells for less than expected.
How you apply
The council usually provides an application form you need to complete — contact the council to get a form or look on their website to download it. Some councils also ask you to come to an interview as well.
Check whether you can also apply for a rates rebate — this could reduce the amount that you owe on your postponed rates.
Conditions you need to meet
Councils usually expect that you'll:
- live in the property
- have owned it for a certain number of years
- keep it insured and well-maintained
- own a certain amount of the property — that is, have no mortgage or only a small one
- tell them about any other loans or mortgages on the property
- not own any other property.
If you have a mortgage on the property, you'll also have to tell your bank or mortgage provider. A note about your rates debt is usually added to the property's title.