Conservation covenants

What is the approximate amount of the rate reduction? Is it done on a 'pro rata' basis based on land area? For example, my current annual rates for the whole property is total $2,500; if I covenant say 75% of the total land, is the rate payment reduced by 75%?

The rate reduction is not pro rata. The value of the “non-covenanted area”, say 25%, and the improvements on this part of the property are the aspects which attract rates charges. The reduction occurs against those items that are based on ‘land value’ – see typical rates charges below. The items in bold are the ones that are affected by rating relief, the other items are not affected by the covenant so that full figures still apply.

COUNCIL - FNDC rates

RUAC - Roading Rate Uniform Rate

RLIFE - Roading Rate Lifestyle Differential - LV - Land Value

06U01 - General Rate Uniform Annual General Charge

06U5C - Ward Service Rate

06WSG - General Rate General Differential - LV - Land Value

EXTERNAL - Regional Council rates

NRCSERV - NRC Council Services Rate

NRCH2O - NRC Fresh Water Management Rate

NRCPEST - NRC Pest Management Rate

NRCFLOOD - NRC Flood Infrastructure Rate

NRCCIV - NRC Civil Defence and Hazard Management Rate

NRCEMSERV - NRC Emergency Services Rate

NRCSPORT - NRC Sporting Facilities Rate

NRCBUS - NRC Far North Transport Rate

06NR2 - NRC Land Management Rate - Far North District

NRTI - NRC Infrastructure Rate - Far North District

Once the covenanted area has been established, the covenanted and non-covenanted areas will be revalued. Bearing in mind that the non-covenanted area is the ‘developed area’ and will have the greater value, even if the covenant covers the greater proportion of the land, that land may have a lower valuation than the relatively small ‘developed’ land area.

I have postponed rates on my covenanted property. I wish to sell the property, but the new owner does not wish to continue with the covenant, do the rates become payable?

In the first 10 years, the rates postponed up to that point (including any postponement fee and interest) will become payable. After the first 10 years of rates postponement the portion of postponed rates that have reached their 10^th anniversary are remitted at the end of that financial year. That is, postponed rates are remitted “1 year at a time” for every year that the covenant remains in force after the preliminary decade.

Put another way, the landowner will always have 10 years’ postponed rates outstanding: after 11 years the first year’s rates will be remitted, after 12 years of postponement the first 2 years are remitted, likewise after 24 years of postponement the first 14 years’ postponed rates will have been remitted (one year at a time).

• The cost to have the ecologist visit and inspect the property; the initial visit and the monitoring visits (in year 1, 5 and 9 after covenant commencement) are borne by FNDC. The drafting of the covenant is also at the expense of Council.
• We recommend landowners seek legal advice prior to signing the covenant and this cost as well as the registration of the covenant on the title is for the landowner.
• In some particular cases a survey may be required and this cost is for the landowner.
• Interest and an administration fee are charged on the postponed rates. The current policy is that these costs are remitted along with the postponed rated rates they relate to at the 10^th anniversary.

Rating relief will occur in the financial year following commencement of the covenant, that is from the following July. If the covenant is signed in August, rating relief will only occur from the following July.