Rate rises no longer ignored
I have a sense of fury and powerlessness at the speed my rates have been rising.
Homeowners didn’t seem to care much about rates in the past.
The annual rises always seemed small compared with the rise in the value of their homes. But rates are beginning to hurt. Mine rose to just under $3600 this year.
I phoned Auckland Council to see how much they’d gone up in 10 years.
The call centre wouldn’t tell me, saying as I hadn’t owned the house that long, it would breach the privacy of the people who used to live there.
I laughed (politely) and pointed out that anyone could check my current rates on the council’s online rates calculator with no apparent protection of my privacy. My appeal fell on deaf ears. I had to put in a Local Government Official Information and Meetings Act request.
When it came back I found the rates on my house in 2005/06 had been $1748.33.
The Reserve Bank’s inflation calculator suggested my rates would have been around $2170 had they risen in line with inflation.
Inflation was up around 25 per cent, my rates more than 100 per cent.
I wasn’t surprised. I had seen this chart prepared for the Local Government minister.
What are people’s options for dealing with rising rates?
They can economise (spend less at cafes, pay the mortgage off more slowly, have bigger insurance excesses, save less into KiwiSaver, etc). Or they can earn more. They can work more hours.
If a person is retired, they could go back to work or take out an expensive reverse equity mortgage to pay the rates, clearing their debt when they sell their home or die.
The council has a rates postponement scheme that works like a reverse mortgage.
The fees and interest charged are not on the council’s website and the call centre didn’t know but the press office says there are one-off fees for land registration and title searches of $85, an annual fee of $50 and interest was charged at 3.5 per cent but could change. There’s also a rates rebate scheme for poorer folk but it’s not very generous.
Then there are more extreme responses, like stomaching the real estate fees and moving to a cheaper suburb or moving in with the kids.
Or you could use your vote to force the council to live within your means.
Grey Power, for example, is calling for a rates policy where rates are capped at no more than 8 per cent of a household’s income. Many believe rate rises must be capped to inflation. Only 36-odd per cent of us voted in the last Auckland Council elections. Amazing, given it’s our money that’s being spent.