The rates burden on Wellington home owners is already hefty - could it get even worse?
Michael Daly - September 18, 2024 • 05:00am
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Already whacked with a 21% rise in total rates for 2024/25, Wellington households are facing more uncertainty about rate rises in future years.
Wellington City Council (WCC) is reassessing water spending plans and the proposed sale of its 34% stake in Wellington Airport.
Both issues are key parts of the council’s long-term plan for 2024-34, which includes forecasts for rate rises over the next decade.
What do Wellington City residents know for sure about their rates?
The WCC long term plan included an 18.5% rise in rates for 2024/25, after a 13% rise the year before.
Council information shows median rates varying between $3276 and $8000 in the Wellington urban area, depending on the suburb. A household that paid $4000 in rates in 2023/24 is facing an increase of more than $700.
Meanwhile regional council, Greater Wellington, has increased its rates in Wellington City by 25%. It calculated rates in 2024/25 for an average value residential property in the city will be $1178 - up $212.
Overall Wellington City households are having to pay about 21% more for rates in the coming year - at least $1000 more for many households.
Many Wellington City households will have to find $1000 more for rates this financial year.
What about forecasts for rates in the future?
The WCC long term plan shows forecast rates increases of 12.8% in 2025/26, 11.4% in 2026/27 and 9.9% in 2027/28. A household that paid $4000 in 2023/24 would be paying about $2500 more by 2027/28.
Greater Wellington is showing rates increases for its entire area - not just Wellington City - of 20.5% in 2025/26, and then 14.5%, 13.3% and 7.1% in following years.
Regional rate rises on average capital value properties would be nearly $200 in 2025/25, and slightly more than $150 in the following two years.
Total rates are rising by at least $3000 over four years for many Wellington City households.
A water leak in central Wellington. The Wellington region is facing huge bills to fix decaying pipes.Conor Knell
What’s adding to the uncertainty about future WCC rates rises?
Two key issues.
One is the Government’s water reform plans. Wellington Mayor Tory Whanau told The Post the council needed time to understand the implications of the policy.
The second is WCC’s 34% stake in Wellington Airport. Proceeds from the sale were to go into a fund for future disaster recovery.
But nine of 16 councillors have signed a notice of motion seeking to cancel the share sale, The Post reported.
If Wellington City Council does not sell its airport shares it could have to consider cutting $400 million from its wider programme, Mayor Tory Whanau says.BRUCE MACKAY / BRUCE MACKAY
Why are these two issues such a big deal?
According to Councillor Diane Calvert, the two issues, which arose after the long term plan was finalised, were so integral to the plan that it could mean all the council’s planned spending, borrowing and rating might need to go back for more public consultation, The Post reported.
On the share issue, Mayor Whanau said officials had advised that without the sale, the council lost its form of self-insurance, and would need to make it up elsewhere. That would be about $400 million from the council’s wider programme.
If the notice of motion succeeded and the sale did not go ahead, the council would have to go out for consultation again, which would take a year.
Wellington Mayor Tory Whanau says she’s also feeling the crunch, and has sold her car to help pay the bills.BRUCE MACKAY / The Post
What does the mayor think of the rates rise?
Whanau said she had recently sold her car to help pay the bills. “I walk to work again, and my mortgage rates have doubled in the last few years.
“I’m feeling the crunch as well, but I also recognise the privilege that I have,” she told Newstalk ZB on Tuesday.
She wasn’t “proud” of the size of the rates increase, but it was an issue across the country.
Many councils had under-invested in such things as water and dealing with earthquake-prone buildings, and that was now having to be paid for.
