Andrew Quarrie is unhappy at having to pay a development levy to create a new title for an old house. Photo: RNZ / Jimmy Ellingham
A district councillor is taking on his own local body for the way it charges development levies.
Manawatū District councillor Andrew Quarrie said ratepayers were being ripped off, but the council said the rules, and their application, were clear.
The stoush centres on a decades-old house in the corner of a block of farmland in rural Manawatū.
"I tried to survey and sell off a surplus house. My son and daughter-in-law wished to purchase the house they were living in, rather than paying rent," Quarrie said.
Despite no new development or building happening, to create a new title he was charged a $5800 development levy.
"The development levy comes about because of a charge by councils because of the increase in demand that new development produces for the district.
"The extra people that are housed in new subdivisions and new houses, they create extra demand on facilities and there's a levy associated with that."
Quarrie paid it - reluctantly.
"This house has been here for probably 70 years. It has occupants in it. There's no additional demand on council services whatsoever," he said.
The levy Quarrie paid sits not with the new title, but on the remaining farmland, which no longer has a dwelling.
There is potential for development there, but Quarrie, who lives on a separate block of land with its own title, said he had no intention of building anything requiring council services.
Therefore, he and others in his situation should not have to pay the levy, he said.
"I'm dead against it. It's totally unjustified. It's a scam. It's taking money from ratepayers. They're demanding payment to get the title. It's unjust. It should not be happening."
Quarrie said he would have no problem paying a levy if he intended to build a house or other development that would draw on council utilities or services.
Surveyor Bill Riordan, Feilding director for Truebridge Associates, said hundreds of people could potentially be charged levies in similar circumstances to Quarrie.
"A development contribution is payable when an additional title is created or additional dwelling is built," he said.
"What it covers is the perceived increase in demand on council services as a result of either building a dwelling or creating an additional lot."
Creating 'a unit of demand'
Manawatū District Council chief executive Shayne Harris said the levy was applicable for a subdivision such as Quarrie's.
"I don't know what he's planning to do. I can only talk in respect of the policy rules, and that's when you create a unit of demand you create the requirement to create a development contribution."
When asked if this was fair, Harris said: "I don't know whether he's got plans or what he's going to do with the lot, but what it does set up now is the ability to be developed as a separate title."
The policy required the levy's collection at the earliest possible stage, which was when subdivision happened, he said.
It was possible to delay payment, but that was complicated and costly.
The policy was in line with Department of Internal Affairs guidelines and had been legally reviewed, he said.
"Development contributions are set up to pay for growth in the district. It's not a user-pays levy. It's a levy that pays for growth infrastructure district wide, so you don't just pay the levy because you're going to build a house."
Quarrie said he was still working out why he and others like him had to pay.
"I would have thought common sense would have applied and I would have thought logic would have applied as well, but sadly that hasn't been the case.
"I think it's a scam, an absolute scam on the ratepayers, and the business ethics are appalling."
Harris said there could be changes made to the levy policy after a review recently went out for public consultation.
"What we are making clear in the policy is the ability to to have that payment deferred until, for instance, a house is built on the property or a development on the property occurs.
"That doesn't exist in the current policy."
Councillors will soon deliberate about possible changes.
Quarrie was unsure if he would be able to take part after he had to sit out a previous discussion with a conflict of interest.