Wellington City Council has agreed in principle to update its Rating Policy, and Rates Remission and Postponement Policy, as part of the development of the 2024-34 Long-term Plan. Updates would incentivise development by increasing the proportion of rates paid on inner-city vacant land and providing rates relief to support the strengthening of earthquake-prone buildings.

The Council’s rating policies define how the city’s overall rates bill is divided up, to determine the proportion each property owner pays. The proportion paid depends on a range of factors, like the property’s capital value, whether it is commercial or residential, and what services the property receives.

The updated policies will underpin the draft Long-term Plan currently in development, which will go for community consultation in April 2024. The changes are in-principle and subject to that process.

Key changes include:

· Increasing the proportion of rates paid on vacant land in the central city, with officers to investigate expanding this geographically in the coming years. Owners of vacant land in the central city would pay $5 in general rates for every $1 that a residential property of the same value pays. Currently there is no separate category for vacant land in the central city. Following consultation feedback, the initial proposal for a 4.5:1 differential has been amended to 5:1.

· Rates relief for earthquake-prone residential buildings with body corporates, and small (one- to two-storey) commercial/mixed use buildings, that are undergoing strengthening work. Rates would be postponed for up to three years prior to seismic strengthening, with postponed rates remitted (waived) once the work is completed.

· Increasing the rates remission for low-income ratepayers from a maximum of $700 to $800 (inc. GST), for ratepayers who have successfully applied for the NZ Government rates rebate.

“It’s important to ensure our rating policies are fair and meet our city’s needs. In doing this review – our first in many years – we’ve identified some mechanisms to help drive our vision of a vibrant, thriving Pōneke,” said Mayor Tory Whanau.

“Targeting vacant land will help creative vibrancy in our city centre by incentivising development. I recently spoke to retailers from Courtenay Place and Cuba Street and there was support for this change. We’ve also had strong support from the public during consultation on this, who asked us to go even further.

“That is why I made an amendment today to further increase that differential, to reflect that public feedback. Additionally, a second amendment was supported that instructed officers to monitor the implementation of the vacant land differential and provide advice on expanding its geographical coverage in the next two to three years.

A proposal to reduce the proportion of rates paid by commercial, industrial and business ratepayers from $3.70 to $3.25 in general rates for every $1 that a residential property of the same value pays was not carried.

"There was strong opposition during consultation to changing the differential for commercial properties, given this would mean a higher rates proportion paid by residential ratepayers. Following this feedback, council voted against proceeding with this change,” said Councillor Rebecca Matthews, Chair of the Long-term Plan, Finance and Performance Committee.

“The advice was that this change in rates differential would impose an additional 4% rates rise on residential properties. That is simply not tenable during a cost-of-living crisis, particularly when there is no evidence that this rates reduction for commercial landlords will flow onto small businesses," said Mayor Whanau.

“My view is that we can support local businesses by investing in local place-making, upgrading the Courtenay Precinct, and continuing to invest in a vibrant arts and cultural scene.”

Councillor Iona Pannett, who has long advocated for financial support for homeowners in earthquake prone buildings, welcomed rates relief for owners of such buildings undergoing strengthening work, in addition to the measures that the Council already has in place.

“Homeowners and small business owners in quake-prone buildings deserve some financial reprieve as they meet the high costs of strengthening. Support from Council will only be part of the solution. We will also need more support from central government, like the assistance offered to homeowners who had leaky buildings.”

The Rating Policy Review consultation was phase three of the 2024-34 Long-term Plan engagement process, following engagement on outcomes and priorities and a Citizens’ Assembly on levels of service.

Formal consultation on the draft Long-term Plan will take place in April 2024. Once adopted by the Council, changes would be implemented from July 2024. See https://wcc.nz/ltp-2024-34

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