By the numbers: Rising rates adds more pain

Saturday, 17 February 2024

How are council rates calculated?

Interest rates are up, insurance costs are growing, and most homeowners can expect bigger rates bills too in the year ahead.

And the drumbeats of doom have been sounding this week, with claims the Government’s repeal of Three Waters will see rates skyrocket even further.

Here are some key numbers you need to know, with some regions expected to feel the sting more than others.

The Christchurch suburb of Aranui. Christchurch City Council is considering a rate rise of 14%.file generic aerial drone

$7.97 billion

According to Stats NZ, that’s the total amount of money councils collected from rates in the year to June 2023. It’s up from $7.36b a year earlier, and $6.74b in the year to June 2021.

8.4%

How much the total amount councils collected in rates increased in the year to June 2023, compared to a year earlier, according to Stats NZ. Most recent data, for the year to last September, shows an even bigger rise of 10.1%. In the year to June 2022, the increase was 9.5%. It was 4.8% in the year to June 2021.

6.0%

The rise in the year to June 2023 in the consumers price index, which measures price changes in basics such as food, transport, health and housing.

$2781

That’s the average residential rate for the whole country for the 2021/22 year, as calculated by the New Zealand Taxpayers’ Union and the Auckland Ratepayers’ Alliance for their 2023 Ratepayers’ Report. It was up $171 on a year earlier.

The groups say it is difficult to make comparisons between councils because councils used various mixes of rates, levies and user charges. While they thought their approach was useful and fair, they cautioned that average rate figures should be a guide only.

$3938.91

The average residential rate in Carterton District Council in 2021/22 as calculated for the Ratepayers’ Report. That was the highest residential rate in the country, while the lowest was $2155.98 in Buller district.

The calculation to find the averages includes all rates, and all user charges or levies residents have to pay.

$2825

The average residential rate in Auckland as calculated for the Ratepayers’ Report. For Christchurch, the figure was $2998, and in Wellington it was $2972. It was $3481.76 in Tauranga, $2651.50 in Dunedin, and $2862 in Hamilton.

Most homeowners also have to pay regional council rates, where the averages range from $225 to $570. That’s not the case in a handful of areas, including Auckland, that have unitary councils.

7.5%

The overall average rate increase proposed for Auckland in the coming financial year. It would be followed by rises of 3.5% and 8% in the following two years. In 2023/24 the increase was 7.7%.

12.8%

The size of the rates increase mayor Tory Whanau says the Wellington City Council is looking at for the coming year. The rise for the current financial year was 12.3%, which followed a rise of 8% in 2022/23.

14%

The rates increase being considered by Christchurch City Council. It follows a rise of 6.4% for the current year, and 4.7% in 2022/23.

5.7% to 7.8%

A rate rise of 25% is being proposed for Hamilton.

The proposed residential rate increase for Tauranga. It follows a median rise, including water rates, of 7.2% for the current financial year, or 9.4% when water was excluded. In 2022/23 the rise was 13.7%.

25.5%

The rate rise being proposed by Hamilton City Council. Mayor Paula Southgate warns it could have to be followed by four consecutive years of 14.1% increases as a result of the Government’s repeal of Three Waters. It follows a 4.9% rise for 2023/24.

$15.35 billion

Stats NZ’s main measure of total council expenses in the year to June 2023. It’s up from $13.2b a year earlier and $12.46b in the year to June 2021.