Government to cap rates

Council rates increases will be capped at 4 per cent as the Government moves to help keep rates affordable for households and businesses, Local Government Minister Simon Watts says.

“For too long, ratepayers have been hit with steep and unexpected rates increases, adding pressure to household budgets at a time many New Zealanders are already feeling the squeeze,” Mr Watts says.

“Our Government is focused on easing cost-of-living pressures and getting councils back to

basics. 

“Under this legislation, councils will be required to keep annual rates increases within an initial target range of 2-4 per cent, putting a brake on excessive increases and giving ratepayers greater certainty.

“It will also sharpen the focus on delivering the services communities expect councils to get right, like fixing the potholes, collecting rubbish and running our pools and parks. 

“We recognise there will be limited circumstances where councils need greater flexibility, such as recovering from a natural disaster or responding to events outside their control. Exemptions will not be granted lightly and will only be available in exceptional circumstances where there is strong justification.

“Ratepayers nationwide have been hit with median increases of 14.2 per cent and 9.2 per cent over the past two years respectively.

“This rates cap is about driving greater fiscal discipline, keeping rates affordable, and ensuring councils are focused on delivering the services ratepayers rely on.”

Councils will need to consider the target range from 1 July 2027 when preparing their long-term plans, and the caps will take full effect from 1 July 2029.