Council-provided vehicles

Mayors and chairs who receive a council-provided vehicle will have the cost of its private use deducted from their annual remuneration.

Councils are responsible for valuing the cost of the vehicle and deducting the remuneration of the mayor or regional chair as shown in the local government members’ determination.

Local Government Members (2019/20) Determination 2019 Clause 9 – Legislation.govt.nz

Actual purchase prices

The Remuneration Authority limits the actual purchase price for a vehicle bought for a mayor or regional council chair. The price is set each year in the determination.

Actual purchase prices include:

  • on road costs
  • dealer charges, and
  • GST paid.

For motor vehicles purchased after 1 July 2018 the maximum price is:

  • $55,000 for a petrol or diesel vehicle, and
  • $65,000 for an electric or hybrid vehicle.

These limits do not apply to existing motor vehicles purchased before 1 July 2018. In these cases the actual purchase prices are grand-parented until the existing vehicles are either replaced or relinquished.

Deductions for vehicles

Remuneration deductions are determined by how the vehicle is classified for use.

Deductions apply for vehicles regardless of when it was purchased.

Full private use

Full private use vehicles are:

  • usually driven home and securely parked by the mayor or regional chair,
  • available for the mayor or regional chair’s unrestricted personal use,
  • used by the mayor or regional chair for a mix of council business and private use, and
  • used by other local authority members or staff on council business, with the permission of the mayor or regional chair. 

The deduction for full private use vehicles is the actual purchase price (v) x 41% x 20%.

For example, the deduction for a full private use vehicle valued at $40,000 is $3,280 per year.

Partial private use

Partial private use vehicles are:

  • usually driven home and securely parked by the mayor or regional chair,
  • used by the mayor or regional chair for a mix of Council business and private purposes,
  • used by other local authority members or staff on Council business, with the permission of the mayor or regional chair, and
  • used no more than 10% of the vehicle’s annual mileage for private purposes.

All travel in a partial private use vehicle must be recorded in a logbook.

The deduction for partial private use vehicles is the actual purchase price (v) x 41% x 10%.

For example, the deduction for a partial private use vehicle valued at $40,000 is $1,640 per year.

The minimum amount for partial private use is 10%.

Restricted private use

Restricted private use vehicles are:

  • usually driven home and securely parked by the mayor or regional chair,
  • otherwise generally available for use by other local authority members or staff on Council business, and
  • used solely for Council business.

There are no remuneration deductions for restricted private use vehicles.

For example

A council provides a mayor or regional chair with a vehicle valued at the actual purchase price of $42,800.

  • Full private use: $42,800 x 41% x 20% = $3,510
  • Partial private use: $42,800 x 41% x 10% = $1,755
  • Restricted private use: $0
For exampleFull private usePartial private useRestricted private use

Annual remuneration as shown in either schedule 1 or schedule 2

$85,220

$85,220

$85,220

Motor vehicle deduction

$3,510

$1,755

$0

Salary paid

$81,710

$83,465

$85,220

Publication of vehicle and remuneration details

The Authority expects councils to publish details of the purchased vehicles in its annual financial statements.

This should include the vehicle’s annual value as a part of the mayor or regional chair’s total remuneration.

A vehicle’s annual value is 41% of the actual purchase price.

Publication of policy

If a council approves the provision of a vehicle for their mayor or regionals chairs the policy must be included in:

  • the council’s elected members’ expenses, and
  • the reimbursement policy published on their website.