Relief for ratepayers with proposed assistance scheme

Thursday, 12 June 2025

The Wellington City Council is deciding whether to financially support the ‘Ratepayer Assistance Scheme’.

A scheme to support ratepayers by giving them access to cheap council borrowing already has interest from major councils with Wellington now asked to get involved.

The proposed scheme, called the ‘Ratepayer Assistance Scheme,’ would be jointly operated by local and central government and has been endorsed by local government minister Simon Watts.

Working as an off-balance sheet tool, it supports ratepayers by leveraging a council’s high credit rating and passing on the interest savings to ratepayers.

The scheme would be a new entity owned by local authorities, providing a national shared service that would undertake administration of ratepayer loans.

LGNZ deputy chief executive Scott Necklen said the scheme provided ratepayers with a choice and it could be used for rates postponement, deferred development contributions or levies, and property improvement loans.

Necklen said the proposal would have tangible benefits to ratepayers, especially with the current cost of living pressures.

“The proposed scheme would provide choice to ratepayers, supporting ratepayers living on fixed incomes, support housing development, and provide a cost-effective way to improve New Zealand’s housing stock through implementing solar panels, batteries, insulation and more.“

Councillors, at a workshop on the issue on Wednesday, were told the interest rate would be 1% to 1.5% lower than standard mortgage rates. It would be 4% to 4.5% lower than reverse mortgages, where people borrowed and only repaid when their house was sold ‒ often when they died.

Councillors were told the scheme could be set up within 12 to 18 months and that Watts would begin working on the scheme from August.

Councillor Tim Brown said the scheme could be used for some home improvements such as solar panels.

Having completed concept testing and a business case, LGNZ was now seeking financial support from councils, with Auckland and Tauranga councils already agreeing to commit financially.

Council spokesperson Richard MacLean said the initiative would offer a number of products used in conjunction with, and in some cases to supplement, existing policy settings such as rates deferral, so ratepayers could access cheaper financing to defer some costs causing extra financial pressure to households.

Councillor Tim Brown said the scheme could be used for some home improvements such as insulation, solar panels and water storage.

British Columbia in Canada had a similar system with 83,000 people using it and the equivalent of NZ$3.2 billion in loans.

LGNZ was committed to exploring other funding and financing tools with Government, he said.

Hugo Ellis, a partner in investment bank Cameron Partners, presented at the council meeting, and said the cost of living crisis, demographic shift of property owners retiring, and the underinvestment in infrastructure was a “massive issue”.

Ensuring the scheme could obtain a high credit rating was the “crux,” said Ellis.

“Through new legislation [RAS] would have the ability to impose a levy against a property or to ratepayers in the same way a local authority does.”

In a statement, Watts said the proposal had the potential to be a cost-effective way to provide relief to ratepayers.

The Energy Efficiency & Conservation Authority (EECA) and Rewiring Aotearoa had also confirmed their support.