Winners and losers in proposed Wellington rating overhaul
Wednesday, 13 May 2026
The winners and losers in a proposed Wellington City ratings overhaul have been outlined, with some owners getting a rates decrease of a quarter but others’ rates more than doubling.
It comes as a presentation given to councillors this week paints a stark reality for the city: For every $100 the average Wellingtonian now earns, $4.30 currently goes on rates but this will rise to $5.90 in five years and $6.10 within the decade.
Ratepayers in 13 suburbs ‒ Aro Valley, Berhampore, Hataitai, Kaiwharawhara, Karaka Bays, Kelburn, Kilbirnie, Mount Victoria, Newtown, Oriental Bay, Rongotai, Seatoun and Southgate ‒ currently pay rates higher than 5 cents on every dollar earned.
Within five years, 43 suburbs will be above 5% with only Glenside, Grenada North, Horokiwi, Mākara, Ngāūranga, Ōhariu, Pipitea and Te Aro below the “affordable” benchmark.
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A council statement said the modelling was based on median income by suburb, including water charges, city and regional council rates and GST, under the assumption of a 3% rates cap from 2028/29 onwards.
One tool to potentially reduce the amount of rates some pay is a change to a land-value-based rating system, rather than the current system which is based on the value of the land plus building on it.
Proponents of the land-based system argue it will open up more housing as it will discourage land-banking or under-developing land.
Council staff on Tuesday gave the council a picture of an imaginary street with multiple building types on it, showing how rates would be affected on different properties under the proposed change.
The biggest decrease was for a central city mixed-use building with 27 units, which would drop by almost 25% while the biggest increase was for an industrial/commercial single unit which jumped by 148%.
However, council chief financial officer Andrea Reeves said the projected changes should not be taken alone as they would come with other changes to rating policy ‒ including targeted rates and the differentials that owners paid. Wellington’’s most well-known, and criticised, differential is a 3.7-times multiplier on commercial buildings.
Councillor Karl Tiefenbacher said it was “insanity” to think that charging land owners more would increase development. There were thousands of of undeveloped sections around the city that were not financially viable for development.
Common Ground Aotearoa, which has been lobbying for the change, has long claimed that about 60% of Wellington residential properties would get a rates decrease and this was confirmed by staff on Tuesday.
Common Ground researcher Jesse Richardson said the council’s diagram was a “helpful aid” but appeared to take random examples which were not necessarily representative.
The council street showed an 8.2% rates drop for a 39-unit apartment block but it appeared to use a block with a large parcel of open land. Some apartment blocks would drop by 50%, he said.
It was hard to see what industrial/commercial unit the council had chosen, to get the 148% increase, as the image showed the Tui beer factory in Mangatainoka, more than 180km north of Wellington.
“The most important thing is that the average Wellington homeowner will pay less under land value rates, and the less wealthy will see the biggest benefits,” he said.
“In other words, land value rates is a progressive policy that will ease the rates burden on middle-class homeowners. This is true regardless of whether you live in a central city apartment or in the suburbs.”
Mayor Andrew Little, who has always been open to considering a change, said it would be inappropriate to have a fixed view now before public consultation on October.
'The bottom line for me is we need to keep rates as low as practicable in an effort to make Wellington more affordable,' he said.