The review will look at how the overall rates bill is divided up – that is, how the Council determines the proportion each property owner pays.
Each year, the Council sets its overall budget as part of the Long-term Plan and Annual Plan process. The rates-funded component of that budget is then collected from property owners.
The proportion each pays depends on a range of factors, such as the property’s capital value, whether it is commercial or residential, and what services the property receives.
Mayor Tory Whanau says Wellingtonians make a critical contribution to our city through their rates, and that looking at how rates are allocated is important and timely.
“We have important work to do and big decisions to make as we move toward a more vibrant, resilient, affordable, and climate-friendly city. It’s a good time to look at whether our rating policies are as fair and clear as they can be.”
Councillor Rebecca Matthews, Chair of the Long-term Plan, Finance and Performance Committee, says that while the Council has periodically reviewed parts of the rating system, an across-the-board review hasn’t been done for many years.
“It’s been a long time since the Council took a proper look at this, and the make-up of our city has changed. We want to work with the community to decide on a better allocation of rates that meets Wellington’s needs, now and in the future.”
Councillors have agreed that the rating policy review will focus on:
- Transparency – Providing clear information so the rates system is understood (including the collection of Greater Wellington Regional Council rates and any levies set), and ratepayers know what they will need to pay. This includes being clear and transparent about the Council’s rates remissions and postponements policies.
- Fairness – Considering affordability relative to matters such as income, age, and geography.
- Efficient use of land – Considering how to address under-utilised land, low-density land use and land banking. For example, considering if land value is a more appropriate measure to base rates on than capital value, and/or whether a different rate should be set for vacant land.
- Māori land - Considering remissions for Māori land (not just Māori freehold land), working with mana whenua.
- Differential rates – Considering how different multipliers are applied to different categories. For example, if there is a need to separate out larger commercial premises from smaller commercial premises.
- Targeted rates – Considering the costs and benefits of targeted rates for specific purposes, such as climate change and development costs.
- Smoothing revaluation impacts – Considering options to smooth out the impact of property revaluations, including the costs and benefits of this.
The Council will be engaging with the community throughout the review process, with formal public consultation occurring in the second half of 2023. Any changes stemming from the review would be implemented from July 2024.