A new Bill proposes capping annual rates rises at 2 to 4 per cent. Find out how it could affect your council, and what exemptions might apply.
Councils could soon face a speed limit on rates rises, with a new Bill proposing to cap annual increases at 2–4 per cent.
What’s happening now
The Local Government (Rates Capping) Amendment Bill has just been introduced to Parliament. Local Government Minister Simon Watts says the Bill is designed to put a brake on rates increases and give ratepayers more certainty, pointing to median rates rises of 14.2 per cent and 9.2 per cent over the past two years.
The idea: councils will have to keep rates rises within a target range set by the Government, starting at 2–4 per cent. It covers general rates, the uniform annual charge, targeted rates and unpaid rates penalties – but not water charges, development contributions and user charges which are dealt with separately.
There’ll be some wiggle room. Councils can apply for an exemption if disaster strikes (think cyclone recovery) or if they can show they’re being financially prudent and genuinely need more headroom. A new regulator will sit in the middle of it all, deciding on exemptions, advising the Minister, and keeping an eye on compliance.
Property Council will monitor the Bill while it makes its way through the House.
What’s next
- 1 March 2027 — Interim 2–4% cap kicks in.
- 1 July 2027 — Councils start factoring the cap into their long-term plans.
- 2029/30 — The cap becomes fully mandatory, with limited exemptions.
- 2033 — Government reviews how the whole thing is working.
To hear more and follow along with this workstream, get in contact with Bella.
Author | Bella Leddy
As a Senior Advocacy Advisor, Bella leads the development of policy and advocacy initiatives that reflect the real-world experience of our members.
With a Bachelor of Laws and Politics from Otago University and previous experience as a policy intern at the Department of Internal Affairs, Bella brings both a sharp analytical mind and a genuine passion for public policy. She’s particularly energised by engaging with members to ensure our advocacy is grounded in industry insight and practical solutions.
Extroverted, thoughtful and service-focused, Bella thrives in roles that connect people and ideas. Outside the office, she channels her energy into teaching group fitness classes – including yoga, pilates and spin – and is always up for a good political yarn.
