Since the Local Government Act 2002 was introduced, local authorities have adopted a variety of rates postponement policies. The Act allows local authorities to determine their own rates postponement policies – unlike previous legislation, which specified the grounds on which postponement could be offered. Under rates postponement policies, councils allow ratepayers to defer paying their annual rates until a future date.
This report examines two kinds of rates postponement policies – optional rates postponement and postponement on the grounds of hardship. Both these policies apply only to residential ratepayers. Postponement on the grounds of hardship was allowed under previous legislation. However, optional rates postponement is a new development, enabled by the 2002 legislation.
A group of councils and a private management company have formed a consortium to offer optional rates postponement. The consortium currently has 14 member councils. All councils offering optional rates postponement are part of the rates postponement consortium.
The concept of rates postponement is straightforward, but designing and implementing a rates postponement policy requires councils to consider complex legal, ethical, and financial issues. Councils need to take into account the interests of ratepayers who may wish to postpone their rates and the interests of other residents. While we have provided our view on a range of issues affecting residential rates postponement, it should be noted that this is general advice, and councils may wish to seek their own advice for specific situations.