Mayor Tim Overall said Mr Fluffy homeowners had sought financial hardship assistance from the council as the NSW government finalises details of its voluntary buy-back scheme.

The NSW has offered Mr Fluffy owners two options – to purchase their house and land, or to purchase the house only and demolish it.

To date, 19 properties in the Queanbeyan Local Government Area, including a unit in a block of 37 units, have been identified as having loose-fill asbestos.

As the scheme is rolled out, Mr Overall said Queanbeyan Council had agreed to provide immediate rates relief for tenanted properties which have remained vacant due to Mr Fluffy. He encouraged owners to make an application for the deferment through council's hardship policy.

Once the owners have entered into an agreement with the NSW government for them to purchase and demolish their home only, the land will be rated as vacant land and charges for services such as waste and sewer use will be reduced to the vacant land category during the demolition and construction process.

Council will also waive the development application, drainage fee and notification fee for construction of a new dwelling by the current owners of the land.

Mr Overall also said the council would ask the state government to waive the long service levy and planning levy fees payable for the development applications for rebuilding a replacement dwelling house.

"(We) are writing to the owners of the properties affected by Mr Fluffy loose fill asbestos in Queanbeyan to let them know of council's decision and what they can now do. I hope (the) decision helps these residents at a difficult time."