Wholesale rates overhaul proposed for Wellington
Tuesday, 23 June 2026
A wholesale rating overhaul proposed for Wellington could hit home owners in the back pocket and put the city council on a potential collision course with international diplomacy.
Wellington City Council will meet on Thursday and vote on whether to send the proposals out for public feedback, with the actual changes being decided as it sets the next long-term plan in 2027.
They include a reduction in commercial rates, hiking rates on more abandoned properties by 400%, switching to land-based rates and reducing the bill to the region’s new water utility, Tiaki Wai.
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Wellington City currently charges commercial building owners 3.7 times the rates of residential properties making it the highest in the country – Auckland is 2.39 and Christchurch is 2.22.
It is partly because Wellington has a big commuter base from outside its boundaries, so those rates help pay for the roads they drive on and toilets they flush while in the city.
But it is also seen as a handbrake on business and development. Five options are on the table ranging from the status quo, through to dropping the differential to 3.4 - which would hike residential rates by about 2.3% - to the most-extreme of a 2.8 differential - which would increase residential rates by 7.4%.
Mayor Andrew Little confirmed the impact on residential rates mixed with an upcoming government-imposed rates cap, made now the most-likely time to get a change over the line.
One of previous mayor Tory Whanau’s big achievements was a 400% rates increase for abandoned or derelict buildings, but only in the central city.
The council is now looking to extend the zone towards Newtown, meaning it would capture multiple empty sites on Adelaide Rd and the long-mothballed site of planned Chinese Embassy on Tasman St.
“Whether it's owned by an embassy or a commercial owner, an unused site is an unused site, and we want to incentivise development happening,” Little said.
“If there are issues that the Chinese Government have, then obviously we would want to work with them and our Ministry of Foreign Affairs in addressing those problems.”
The Chinese Embassy was approached for comment.
Meanwhile, the current system is based on the value of the land a building sits on plus the building itself. A proposed change, if adopted, would charge based only on land value.
Proponents argue it will open up more housing as it will discourage land-banking or under-developing land. Councillor Karl Tiefenbacher previously said it was “insanity” to think that charging land owners more would increase development.
Little’s triennium plan specifically set out a plan to consider the change.
But council staff, in writing the agenda, pointed out some issues: The change could cost up to $2m, it may be better to wait a potential amalgamation of Wellington councils, and there were also other big rating changes coming via a new water bill and rates cap.
Little confirmed this may have to wait until after an amalgamation decision.
The council papers also show consideration is being given to reducing future rates paid by Tiaki Wai, which takes possession of council pipes and water infrastructure on July 1 so will have to pay rates on them.
Council papers show that, with Tiaki Wai’s planned major upgrades of water assets, they would soon increase in value and hence the amount of rates paid.
“This creates a risk of placing additional financial pressure on a critical infrastructure provider, which in turn would likely be passed onto ratepayers through water charges,” the papers say.