The cost of living changes from July 1, how will you be affected?

Wednesday, 1 July 2026

The annual July 1 financial reset introduces significant changes to New Zealanders' wallets. While water rates, postal costs, and vehicle levies rise, some relief arrives via lower home insurance fees and off-peak power savings.

Today marks the annual July 1 financial reset, and with it, a raft of changes that could hit, or help, your wallet.

It comes as Kiwibank's latest outlook said the economy was on the road to recovery.

After a bleak start to the year with the war in the Middle East lifting the price of oil, causing prices to rise, Kiwibank chief economist Jarrod Kerr was now predicting inflation had reached its peak.

“We think it peaks about now, around 4.2% and then falls sharply with the price of oil into next year. We could have inflation back at 2% next year, which would be a real triumph,” he said.

“We are optimistic for households and businesses. We think inflation falls back. We think the recovery will take hold later in the year. It's just a matter of waiting out this rough patch.”

But while some of the price changes implemented today will make it harder for already struggling households, there are some positive payment increases and new rules too. Here’s the rundown of some of the changes:

Hurting the pocket

Auckland's water bills rose 7.2% today, an average increase of about $2 a week, to pay for infrastructure upgrades.

The price of sending letters has increased by 70 cents. That means a standard letter has gone up to $3.60, a large letter will cost $4.90 and oversize letters will be $6.20. It's a whopping 700% increase over 20 years.

July 1 saw a number of cost changes for households introduced. (file photo)

ACC's new levy structure comes into force, with motorcycles split into three engine-size categories.

For larger bikes, annual registration will jump to $816, up from $540 last year. Next year they will rise again to $960.

The Fire and Emergency levy for vehicles will also increase by $15.50 a year per vehicle

Helping the pocket

But the changes aren't all bad.

Household power bills could come down, under new government rules.

Major power companies must now offer ‘time of use’ pricing options, meaning New Zealanders can get cheaper or even free power during off-peak times.

The Fire and Emergency levy for home insurance will decrease up to $12 a year.

People receiving weekly ACC compensation for more than half a year will have their payments increased by 1.97%.

ACC's funeral grants, survivor grants and weekly childcare payments will increase by 3.08%.

Paid parental leave has increased. The maximum rate will increase from $788.66 to $811.05 a week before tax. The minimum rate for self-employed people lifts from $235 to $239.50.