Nasty Wellington rates shock as new figures published

Wednesday, 24 July 2024

Wellington City knew big rates rises were coming. For many the actual increases are even-higher.

Many Wellington City home owners have received a nasty surprise after new rates costs came out with increases higher than the already-eye-watering planned increases.

The council consulted on, then voted in, an effective rates increase of 18.5%, which included a special levy for a state-of-the-art sewage sludge facility.

Meanwhile, Greater Wellington Regional Council voted in a 19.8% increase.

But the amount people would actually pay in rates was on Tuesday put up on the council website. For many in Wellington city, the increase was in excess of 21%.

Greater Wellington Regional Council chairperson Daran Ponter said anomalies with the rating system could see some in the region get a 15% rates increase and others up to 30%.

Rates are a combination of about four-fifths city council rates and a fifth from the regional council.

Regional council chairperson Daran Ponter said variations around the region could see some people’s rates increase by as little as 15% while others could go up by 30%.

The regional council on Tuesday said the variation between Wellington councils was because there were three areas across Wellington, with ratings based on values at different times.

The council on Wednesday clarified there were actually nine areas but it used a tool, called equalised capital value, to smooth out anomalies caused by ratings values done at different times in the housing market.

Wellington City was last valued in 2021 and will be done again later in 2024, while Hutt City and Upper Hutt were in 2022, and Porirua was in 2023.

But over that period New Zealand’s average house price has gone from a peak of $1.063m in January 2022 to a low of $888,930 in May 2023, according to QV figures.

However, the equalising tool was meant to smooth out the anomalies.

Wellington City Council spokesperson Richard MacLean said confusion about rates increases came about because regional and city council rates bills came as one.

Because the regional council had tweaked the difference for residential and commercial rates the true increase, in Wellington City, for the regional council was 24.5%.

Hutt City Council voted in a 16.9% rates increase and, with new rates bills now listed on line, Mayor Campbell Barry had not heard of anyone getting a lower increase than expected.

Any relief would be welcomed even if it was was “swings and roundabouts”, he said

“You could find yourself in a future rates cycle with the shoe on the other foot.”

Porirua and Kāpiti are yet to post their new property rates bills.

Woburn, Lower Hutt resident Brett Nicholls knew his rates were going to go up by about 17% and that was roughly where they landed. But this came on top of a 34% insurance increase and his mortgage repayments going from $720 to $980 a fortnight.

“Everything is hitting at once,” he said.

Paul Fabian, from Upper Hutt-based rates lobby group NZ Empowered, said rates increases seemed to be hitting people with lower valuations harder.

“Many feel misled and many feel the consultation was misleading as until the adoption the term average increases was not used for the first year's increase.”

Porirua mayor Anita Baker said the regional council’s average residential rate increase there was the highest in the region.

“But in dollar terms we will pay less than Wellington, Hutt City and Kāpiti Coast once property values and targeted rates are factored in.”