A Taranaki couple living on leasehold land are facing financial ruin and risk losing their home after their land lease increased by 1500 per cent.

Jeannie and Richard Boon live on one of about 700 leasehold properties in Waitara and have been paying a lease of $370 a year for the past 21 years.

But in August last year the New Plymouth District Council (NPDC), which administers the leases, raised the rent to $5940 - an increase of about $110 a week.

The Boons, who live on Leslie St, received correspondence from the council before the expiration of the lease, but chose to ignore it.

On Monday, they were hand-delivered a letter from an NPDC representative advising them they now had until next week to settle the issue or their lease would be terminated.

The letter stated the couple had three options the first involved renewing the lease for a further 21 years at $5940 per annum. Alternatively, the Boons could request a new lease to be offered for sale by auction or, by choosing to not renew the lease, their current contract will cease and their house will revert to council without any payment or compensation to the Boons.

Jeannie said while they didn't want to end their tenancy, they also didn't want to sign the new contract.

"When I sign something I'm putting my name to something that I agree too - I don't agree to it," she said.

"That's my gripe."

The 54-year-old, who works two jobs, said the increase was too steep and it had left them struggling financially.

"We've had to cut a lot of our insurances just to make ends meet."

They had made a few payments towards the revised amount but couldn't afford to maintain them and were already in arrears $2970.

NPDC Chief Financial Officer Alan Bird said while he couldn't discuss the Boons specific case there was a handful of Waitara rents which hadn't been paid despite ongoing talks for months and sometimes years.

"We work with leaseholders to help them by offering flexible payment plans for rents and arrears," he said.

Bird said non-payment impacts the rest of the Waitara community as rent revenue is ring-fenced by legislation for projects in Waitara.

The majority of Waitara lease rents, more than 95 per cent, were paid in accordance with their lease conditions, he said.

Rents were determined in line with the national Public Bodies Leases Act and NPDC contracts an independent registered valuer who sets the market rent on the unimproved land value, he said.

Janine disagreed with the council having authority on setting the price of rent given the contentious history of Waitara land.

"It's not their land," she said.

The land was originally confiscated from Te Ātiawa and its two hapū, Otaraua and Manukorihi, in the 1860s by the Crown.

A bill, the New Plymouth District Council (Waitara Land) Bill, is currently before Parliament which if passed would allow Waitara residents to buy the land they live on - proposing 780 leasehold properties become freehold, with 60 hectares of land to be given back to Te Atiawa.

But Jeannie said they could not afford to buy the land their home sits on.

She said many years ago, the NPDC had promised they would be able to purchase the holding for about $4500 but that never eventuated and they would now have to pay about $120k.

Jeannie said with a "shotgun to the head" they would likely sign the new contract.

"I'm going to have to sign or else what are they going to do? Kick us out of our home?"