Wellington lawyers alerted to voluntary targeted rate
The Greater Wellington Regional Council is advising lawyers acting for home buyers that they should be aware of the voluntary targeted rate which is part of its "Warm Greater Wellington" home insulation and clean heating scheme.
The scheme is offered in conjuction with the Efficiency and Conservation Authority's national "Warm Up New Zealand: Heat Smart" programme. Through an "opt in" or voluntary targeted rate, it provides additional financial assistance of up to $2,600 per ratepayer to help fund the remaining cost of home insulation and clean heating over and above the grant provided by the EECA.
Greater Wellington says it is important for lawyers, valuers and real estate agents to ensure that all parties involved in the sale and purchase of a property are aware of the rate and can negotiate in good faith.
Details provided by Greater Wellington of the scheme are as follows:
What is a voluntary targeted rate?
The term “voluntary targeted rate” describes situations where a council funds specific activity (clean heating, localised sewerage schemes) on behalf of an individual ratepayer because the activity meets council policy objectives as well as benefits the ratepayer.
The scheme is self-funding: it does not impose any additional costs on regional ratepayers other than those whose properties are covered by the scheme. Homeowners who take up the offer repay the financial assistance through the targeted rate (with interest) over a 9-year period.
The Warm Greater Wellington scheme has been designed to be as low cost as possible to specifically enable low and fixed income earners the chance to benefit from the EECA “Warm up New Zealand” scheme and have their homes insulated and/or efficently heated.
As the funds for the Warm Greater Wellington scheme are recovered by Greater Wellington via the targeted rate, it is important for potential home buyers to be aware of its existence. This is particularly the case in the first year when the work has been carried out and the first rate has not been set (the rate is set in July each year).
The funds do not need to be fully repaid when a property sells; after a change of ownership the remaining portion of the targeted rate is repaid by the new owner.
How it works
- The ratepayer completes an application and agreement.
- Greater Wellington approves application, the work is carried out and Greater Wellington is invoiced and pays for the work agreed to.
- In the following July the rate is invoiced. If no additional payments are made, the rate will be in place for nine years.
- As Greater Wellington does not collect its rates directly, each month the Wellington region’s eight local and district council’s receive an updated list of all approved applications which are used to update their enquiry and LIM information systems.
- The application and agreement also has a clause that requires people selling their property to inform potential purchasers of the voluntary targeted rate. The April 2012 reprint of the application forms has further strengthened this requirement.
The following clauses are from the Application Agreement:
"4.2 Greater Wellington intends to include the targeted rate on the Land Information Memorandum (LIM) for the property
4.3 If the ratepayer intends to sell the property in the period after this agreement has been entered into and while a targeted rate will be or is being assessed against the property, the ratepayer must: (1) notify Greater Wellington in writing of the sale; and (2) tell the prospective purchaser about the targeted rate and include provision in the sale and purchase agreement recording the disclosure
4.4 Any failure by the ratepayer to comply with the obligations in clause 4.3 entitles Greater Wellington to demand and receive payment from the ratepayer for all amounts that are unpaid or are still to be assessed in respect of the targeted rate (by any means available to Greater Wellington)."
Further information is available here.
Last updated on the 6th July 2016