After previously opposing the Rates Rebate (Retirement Village Residents) Amendment Bill, the National Party is now supporting the proposed legislation after the Government has addressed some of the Opposition’s concerns with the Bill.
The legislative changes will extend the Rates Rebate to retirement village residents under a license to occupy agreement.
Why village residents should receive rates rebates
The Rates Rebate Act was passed in 1973 to provide some financial relief to ratepayers who would be financially stretched by paying local government rates on their properties. Back then, the concept of a retirement village with its unique ‘licence to occupy’ regime was unknown. Now, retirement villages are home to some 26,000 older New Zealanders. Many believe income-eligible residents should be entitled to a rates rebate and there have been calls for some time to have the Rates Rebate Act to be reviewed.
In 2007 the Report of the Local Government Rates Inquiry noted that the current rates rebate scheme had a number of exclusions and eligibility gaps that needed to be reviewed. The exclusion of retirement village residents was singled out as an example. The report recommended that residents be eligible for the rates rebate scheme. However, in order for this to happen, the Rates Rebate Act needs to be amended.
Not everyone agreed there was a case for change. Some officials have argued that retirement village residents are not ratepayers and are not liable for the village’s rates. They argue that licence to occupy agreements (LTOs) are not registered as separate rating units and therefore the resident cannot be eligible for a rates rebate.
However, an occupational right agreement will require residents to pay their share of the costs of running the village, which will invariably include rates. The costs are charged to residents as part of a weekly or monthly fee.
Further, councils are also increasingly charging rates across all units in a retirement village, rather than making one charge across the entire village, which suggests that councils see the individual dwellings in the village as rateable units.
The Retirement Villages Association (RVA) has long held that it is inconsistent to deny a rates rebate to an income-eligible LTO resident when their neighbour over the fence is entitled to receive it, only because retirement village living wasn’t envisaged when the legislation was drafted.
Dyson’s Bill gets green light
Labour’s Ruth Dyson submitted the Rates Rebate (Retirement Village Residents) Amendment Bill which was drawn from the ballot in May 2016. The Bill sought to allow allow residents to apply directly for a rates rebate.
National initially opposed the Bill, describing it as “unworkable and a ‘once over lightly approach to law-making”.
“The Bill had very little detail on how ratepayers could apply for a rebate when living in a retirement village, it posed uncertain costs on local authorities and retirement village operators, and the very department tasked with implementing the new provisions was strongly opposed,” says National’s Jami-Lee Ross.
National raised its concerns at Select Committee last year, requesting more time to get the Bill right. The Select Committee and the Supplementary Order Paper allowed the changes to be made. The Retirement Villages Association (RVA) was given the opportunity to participate in that process.
RVA executive director John Collyns is delighted with the progress on this issue.
“It will be fantastic to have the House’s unamimous support for something the RVA has been lobbying for for at least a decade.”
“Around half our residents only have their National Super to live on so this Bill offers real benefits to them.
“We thank MPs in general for their support and the Hon Ruth Dyson in particular for her vision to make this important change a reality.”