Rates

Our costs for providing services (our operating costs/operating expenditure mainly come from our rates income).

The realities are:

• Kāpiti has many natural advantages, but we don’t have the income-generating assets other local authorities have to draw on. For example, some councils have ports, or funds set up from the sale of local power suppliers.
• We’re facing rising costs on all fronts – including flow-on effects from the pandemic to material prices.
• We limited the average rates increase to 2.6 percent for the 2020/21 year in response to the impacts of the pandemic. Inevitably, like a number of councils, we’re now facing a higher rates increase.

We’ve received strong feedback from our community that while people would prefer lower rates increases, they do not wish to see services and facilities cut to reduce rates. Some of what we’re consulting on in this Long-term Plan signals how we might be able to reduce this dependency in the future.

Proposed rates for 2021/22 

How the proposed rates increase would affect properties

As explained, Council is proposing an average rates increase of 7.8 percent for 2021/22. However, the rates increase will vary for different properties across the district. This is because of:

• differences in properties – value, type and location
• the changes in your property’s value after last year’s revaluation by Quotable Value (done every three years)
• the proposed changes to our rating system outlined on pages 76–78
• the proposed increase in rates from Greater Wellington Regional Council (GWRC).

The new rates for 2021/22 are decided by Council when they adopt the Long-term Plan 2021–41 in June 2021, after they have considered all the feedback received on the proposed changes. The first rates instalment of the new rates will be sent out in August 2021. We’re sending letters to all ratepayers explaining this, and putting the information on our website.

Details of proposed rates for your property

You can see the proposed rates for your property along with the difference that your property revaluation has made and the proposed changes for the coming year. Visit our proposed rates section. 

Impact of increased property values

In August 2020, all properties in the district had their three-yearly revaluation by Quotable Value, and owners will have received notices of their new valuations in early November 2020. Along with the rest of the country, our properties have risen significantly in value. Rising property values in the district don’t affect the total amount of rates we collect, however they do affect how rates contributions are shared. If the value of your property has increased by more than the average across the district, then your ‘share’ of the rates will go up, and if your property value has increased less than the average, your rates 'share' will be less than before, making your increase less than the average.

Changes proposed to rating system

As a result of its review, the Council is proposing some small changes to improve equity. The key changes are to:

• Transition a further $225,000 from the districtwide general rate to the commercial targeted rate (total $650,000). The recent revaluation of properties saw a shift in rates with some $450,000 moving from other property types to  residential. We propose reducing this impact, by transitioning a further $225,000 from the land value based districtwide general rate to the commercial rate. Increasing the proportion of Council’s economic development costs to be  funded from the commercial targeted rate, reflects the level of benefits received by the commercial sector from the activity. Commercial will still be paying slightly less overall.
• Transition the remaining 20 percent land  value roading rate ($2.513 million for 2021/22) to capital value. Council recognises that it’s confusing to have our roading costs collected through two separate rates, so we propose transitioning it all to the one rate based on the capital value of a property.
• With the proposed changes, recovering the 2020/21  rates requirement using the 2020 values would result in residential ratepayers paying an additional $250,000 compared to $450,000 if no changes were made (before annual  rates increases including GWRC rates).

These changes would help alleviate some affordability issues, and move closer to the target rating system proposed in 2017, by reducing rates collected through land value charges from 37 percent to 34 percent and increase rates  collected through capital value charges  from 15 percent to 18 percent. We want to hear the community’s views on the proposed changes to the rating system.

What are the options?

• Status quo - based on 2020/21 rates requirement and new rating valuations, residential ratepayers would pay $450,000 more in rates;  commercial, lifestyle, rural and utility properties would pay $450,000 less in rates.
• Change proposed
  • Transition a further $225,000 from the districtwide general land value rate to the commercial rate to promote economic development in the district ― transition the remaining 20 percent ($2.513 million for 2021/22) land value roading rate to capital value.
  • The impacts of the proposed changes (based on the 2020/21 rates requirement and new rating valuations) would see residential ratepayers paying $250,000 more in rates compared with $450,000 under the status quo option of the current rating system.

The impacts of the proposed changes (based on the 2020/21 rates requirement and new rating valuations) would see residential ratepayers paying $250,000 more in rates compared with $450,000 under the status quo option of the current rating system.

Concerns about affordability

According to the 2007 independent inquiry into local government rates report, rates shouldn’t be more than five percent of household income. Council looks at affordability as part of its considerations. The latest affordability statistics provided by economic consultancy firm Infometrics indicate some areas – Waikanae West, Ōtaki and Paraparaumu Central – are still more likely to have rates over five percent of household income than households elsewhere in the  district.

To help address affordability, both the Government and Council offer support for lower-income ratepayers on a case-by-case basis through the government rates rebate scheme and Council’s rates remission (assistance). See our rates section for more information.