Local Government Magazine
Local Democracy

Overdue rates relief for Maori-owned land

By Linda O’Reilly, Brookfields.
The passing of the Local Government (Rating of Whenua Maori) Amendment Bill (the Bill) will come as a relief both to those seeking to resuscitate moribund Maori land holdings, and local authorities frustrated by the pointlessness of trying to collect rates on unproductive Maori land. 

The new tools offered will hopefully enable productive use of such land to be unlocked to the benefit of its Maori owners and the wider community.

The new legislation primarily amends the Local Government (Rating) Act 2002 (the Act), with those changes being mirrored in the Infrastructure Funding and Financing Act 2020 in respect of levy payments under that Act, and the Urban Development Act 2020 in respect of targeted rates set by Kainga Ora.

The stated purpose of the Bill is to support the development and provision of housing on Maori land, and to modernise rating legislation affecting Maori land. [Maori collectively own about 1.4 million hectares of free-hold New Zealand, or about five percent of all land here – Ed].

I would characterise it as a long-overdue tidy-up, coming in a timely manner hard on the heels of the reforms to the Local Electoral Act 2002 affecting Maori wards and constituencies. The purpose of the Act is amended to include facilitation of the administration of rates “in a manner that supports the principles set out in the Preamble to Te Ture Whenua Maori Act 1993”. I will save you scrambling to look up those principles by noting that they include the desirability of recognising:

… that land is a taonga tuku iho of special significance to Maori people and, for that reason, to promote the retention of that land in the hands of its owners, their whanau, and their hapu, and to protect wahi tapu: and to facilitate the occupation, development, and utilisation of that land for the benefit of its owners, their whanau, and their hapu…

One might interpret this to say, in relation to rating, that land ought not to be inhibited in its ability to be used nor at risk of being lost because of the burden of rates. Naturally, these principles need to be balanced against the cost to the wider community, but the Bill, by and large, seems likely to contribute to the overall well-being of communities. 

If the freeing-up of land for development comes at the cost of largely uncollectible rates, then so be it. In the future rates will be paid on land put to good use, and all will benefit. 

There is quite a lot of detail in the Bill, and local authorities will need to adjust their rating systems to take account of those changes, including to rating information databases, rates records, assessments, and invoices. 

Not least of the changes is the creation of a new category of ratepayer and underlying rating unit, being respectively a person named in the rating information database as the ratepayer for a separate rating area, and a rating unit on Maori freehold land divided by a local authority into separate rating areas. This allows for the effective disaggregation of land enabling separate rate accounts for multiple homes on land to enable access to rates rebates. 

Conversely, a ratepayer with multiple rating units of Maori freehold land will be able to apply to have them treated as one on more generous grounds than currently allowed by section 20 of the Act, thus reducing the impact of uniform charges.

At the same time, there is a tidy up of the provisions relating to the collection of rates from persons actually using Maori freehold land and land that has ceased to be Maori land by virtue of a declaration by the Registrar of the Maori Land Court. 

Land in the latter category, where still beneficially owned by the persons or descendants of the persons who owned it before it ceased to be Maori land, is protected to a degree from being sold as abandoned land.

A new power allowing the chief executive of a local authority to write off rates that cannot reasonably be recovered is added to the Act. This provision also applies to general land, but there is specific provision to write off rates on Maori freehold land that would otherwise be payable by a person beneficially entitled to a deceased owner’s interest.

In other words, successors to interests in Maori freehold land may be able to be relieved of the historic rating debt which that land carries.

There is also a new provision for the remission of rates on Maori land under development. An application can be made for the remission of rates on freehold Maori land where development is underway or proposed. 

Rates may be remitted in whole or part where the Council finds there are benefits from the development in terms of employment, new housing, improvements to the rating base, support for marae, or to the owners by facilitating occupation, development and utilisation of the land. The remission may be for the duration of the development and subject to conditions on commencement and completion.

Additionally, the categories of non-rateable land in Schedule 1 of the Act are expanded to include Maori land protected as if it were reserve under a Nga Whenua Rahui kawenata (a funding programme to protect the natural integrity of Maori land through the use of 25-year renewable covenants or kawenata), more generous provisions for marae, meeting places and meeting houses, and unused Maori freehold land.

Linked to these changes to the categories of non-rateable land is a transitional provision that requires all local authorities to write-off rates arrears on land subject to a Nga Whenua Rahui kawenata and unused Maori freehold land as at 1 July 2021.

The Bill is carefully written to free unproductive Maori land from existing debt and facilitate the development of that land for productive use so that it may contribute to the rating base in the future. 

As such, it deserves to be universally welcomed. LG

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