Private use of a vehicle provided to mayor or regional chair

Councils may decide whether or not a car is to be supplied for the mayor or regional council chair and on what basis. The determinant is what is most cost effective for the Council and ratepayers.

If a motor vehicle is provided to a mayor or regional chair for their private use the Council is responsible from 1 July 2018 for valuing the cost of private use and for making the appropriate deduction from the mayor or regional chair’s annual remuneration as shown in the determination.

Maximum purchase prices

The Authority has set a limit on the actual purchase price that may be paid for a motor vehicle bought by a Council for the mayor or regional council chair’s use. The maximum purchase prices will be set each year in the determination. The maximum purchase prices applying for motor vehicles purchased for the year beginning 1 July 2018 are for:

  • a petrol or diesel vehicle – $55,000 (including on road costs, dealer charges and GST paid)
  • an electric or hybrid vehicle – $65,000 (including on road costs, dealer charges and GST paid).

Note the above limits do not apply to existing motor vehicles (bought before 1 July 2018) currently provided to mayors and regional chairs.  In these cases the actual purchase prices are “grand-parented” until the existing vehicles are either replaced or relinquished.

Valuing the private use of a vehicle

Usage criteria

One of following criteria must be applied by the Council (for all vehicles purchased either before or from 1 July 2018):

Full private use – the vehicle:

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

Partial private use – the vehicle:

  • is usually driven home and securely parked by the mayor or regional chair;
  • is used by the mayor or regional chair for a mix of Council business and private purposes;
  • may also be used by other local authority members or staff on Council business, with the permission of the mayor or regional chair;
  • is used of the vehicle for private purposes accounts for no more than 10% of the vehicle’s annual mileage; and
  • all travel in the vehicle is recorded in a logbook.

Restricted private use – the vehicle:

  • is usually driven home and securely parked by the mayor or regional chair;
  • is otherwise generally available for use by other local authority members or staff on Council business;
  • is used solely for Council business;  and
  • all travel in the vehicle is recorded in a logbook.

Calculate deducations

If the mayor or regional chair is provided with a vehicle, the Council must deduct from the annual remuneration of the mayor or regional chair the appropriate amount calculated in accordance with one of the following formula:

Full private use: 

  • V x 41% x 20%           

eg: $42,800 x 41% x 20% = $3,510.

Partial private use: 

  • V x 41% x 10%                       

eg: $42,800 x 41% x 10% = $1,755.

Note an amount less than 10% for partial private use is no longer applicable.

Restricted private use:          

No deduction from annual remuneration.


Where:

  • V = actual purchase price, on-road costs, dealer charges and GST paid
  • 41% = assessed annual value of motor vehicle
  • 20% = assessed as full private use
  • 10% = assessed as a lessor amount of private use which must be supported by a log-book
For example

Full private use

Partial private use

Restricted 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

The Authority expects that if a mayor or regional chair is provided with a motor vehicle, the Council will publish in its annual financial statements the vehicle details including its annual value as a component of the mayor or regional chair’s total remuneration.