Rate payers face possible $25m leaky homes bill
20 May 10Tauranga ratepayers face a potential $25 million leaky homes repair bill if the Government pushes ahead with its financial assistance package.
It is part of a rates double whammy following yesterday's Budget announcement that GST is to increase to 15 per cent.
The lift in GST translates to an extra 2.2 per cent on this year's proposed 10.9 per cent rates rise - or another $42 on the GST payable on a typical Tauranga residential rate of $1652.
However, the impact this year may be less because the GST increase will probably not take effect until the second rate demand is sent out.
The council will decide next month how to fund the extra 2.5 per cent of GST.
Tauranga Mayor Stuart Crosby said it was more than likely that the full 15 per cent would be passed on.
"We are running a tight budget and to absorb 2.5 per cent for a part of the year would be extremely difficult."
A special council meeting is planned next week to decide the response to the Government's leaky homes package.
The potential burden on ratepayers to fix the city's leaky homes was calculated after the council sampled 23,000 homes and units built between 1992 and 2006 to see how many showed signs of leaking.
It was found that 6.6 per cent were leaking.
Transposing that figure across all 23,000 homes and identifying how many were certified by the council left a potential council liability of $25.6 million.
The liability was calculated according to the proposed formula in which the Government and local authorities each contributed 25 per cent of repair costs and the homeowner funded the remaining 50 per cent.
Mr Crosby said fault for the leaky homes lay with a number of parties, and a New Zealand-wide effort was needed to fix it.
He said the Government's analysis of the scale of the problem identified that if 50 per cent of the Tauranga people with leaky homes went down the proposed new path, then the liability for the council would be $20 million-plus.
However, the difficulty was that no one really knew the size and scale of the problem, or how many would take up the scheme.
Source: Bay of Plenty Times
