Rates lower for businesses, higher for vacant land in council proposal

Wednesday, 6 September 2023

Businesses could get a discount on their rates while owners of empty, inner-city buildings such as Courtenay Central could pay more.

These new rating proposals will go out for public consultation later this year, as part of the rating policy review.

The review is not focused on making rates higher or lower but on changing the proportion paid by different groups — for example businesses are charged more than residents.

Originally the proposal was to change the entire basis of Wellington’s rating system from capital value to land value only, but that was ditched after it became too difficult within a one-year time frame.

Iona Pannett said it was “absolutely fundamental” that residents made submissions on the review. “It’s a question of how we pay for things.”

It was “great to be moving along with this,” said chairperson Rebecca Matthews.

John Apanowicz said it was an issue many people cared about and wanted to discuss with councillors. “I’m very keen to get this out there for consultation.”

One proposal is to charge higher rates for unused land in the inner-city. The plan is to introduce a differential of 4.5 for vacant, inner-city land — meaning rates for sites like the empty Amora Hotel would be 4.5 times higher than residential rates.

Another major proposal is to decrease the proportion of rates paid by businesses. Currently, businesses pay $3.70 of rates for every $1 a resident would pay.

The council is proposing to decrease this differential to 3.25 - but it would mean residents have to pay an increased proportion of rates, leading to an approximate 4% rates increase.

The decrease in the differential would bring commercial rates more into line with Porirua (3.1) and Lower Hutt (3.46 in the CBD and 2.82 in the suburbs).

“I’m a little bit concerned about the differential. Home owners and renters need to be clear and understand you will be paying more,” Pannett said.

It was clear the council needed more funding tools going forward, and the review was a good signal that they were turning to other avenues, Pannett said.

Behind the scenes councillors had been keen to target underutilised land as well as vacant land, but it was too difficult to define.

“It’s deeply frustrating to me that we can’t make people do more with their land,” she said.

The review would also drop the rates remission for buyers of new-build first homes, which has been underused. Pannett moved an amendment to keep this, saying the council should not be dropping tools which could get people into housing, but was voted down.

The other proposal as part of the review would change how multiple rating categories apply to properties. The threshold for properties with multiple land uses would change from $800,000 to $1.5 million.

There will be public hearings on the rating policy changes later in the year.