Watercare has said anyone on the Hibiscus Coast without resource consent may have to wait until 2031 for a wastewater connection.
Trevor Knox and his family have lived at their home on a rural lifestyle block for 21 years. Photo / Dean Purcell
“We are trapped,” said Knox, who has watched new housing creeping its way from Ōrewa Beach towards the lifestyle block his family bought into 21 years ago after moving to New Zealand from England.
“The rate increase is exorbitant. We pay for our own septic tanks and tank water. We don’t get anything from the council. It’s not fair. We are just going to have to absorb the extra cost and pay it.
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“They are saying our land is now prime for subdividing, and yet we can’t subdivide it, we can’t develop it because Watercare is not issuing any more resource consents.”
Knox said the council should have been more transparent about the reasons behind the rates increase, arguing that residents shouldn’t have to pay $10,000 a year in rates when they’re unable to realise the value of their land.
Auckland Council head of rates and revaluations, Rhonwen Heath, said the scarcity of large blocks of land in the Ōrewa area suitable for future intensive land development, plus the property’s elevation, views and proximity to the Northern Motorway, led to the increase in value.
Rating valuations are required to reflect the highest and best use of the property, said Heath. The Knox property had been zoned residential since 2019.
Ratepayers were notified of their new valuations in June and had until July 25 to lodge objections.
Heath said if the owners of 248 West Hoe Heights believe the rating valuation was inaccurate, they may wish to seek professional valuation advice and explore their options. Knox confirmed he did not submit an objection.
Heath understood that some property owners facing significant rate increases – due to valuations rising well above the Auckland average – may be concerned about their ability to pay.
“We encourage people in that situation to contact the council as early as possible because there are a range of support options,” she said.
The Knox family’s complaint is one of the latest since a Herald data analysis revealed that this year’s rate take is jumping by 9%, considerably more than the official 5.8% average residential rates increase or even the 7.2% figure for commercial rates.
Over the years, Trevor Knox has watched new housing spread closer to his lifestyle block at Ōrewa. Photo / Dean Purcell
This year the total rates take will be $3.49 billion, an increase of 9% from $3.20b last year. Total residential rates will be about $2.29b, up 8.6% from $2.11b.
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The Herald analysis has also found large errors in some of the new rates bills sent out to ratepayers, which the council said appeared to be due to human error.
Last week, the Herald reported rural communities on the outskirts of the Super City are being hit with “staggering” rate increases coming “out of left field”, according to two local politicians.
Residents in rural towns such as Waiuku and Helensville are facing rate rises of more than 23% in some cases, Franklin local board member Gary Holmes and Rodney local board member Mark Dennis said.
How Auckland Council sets the rates
The relationship between your property’s value and your rates bill is often misunderstood, but it is relatively straightforward.
The primary driver of your rates is the council’s decision on how much to collect in rates from residential properties. This year it is $2.3b.
The council needs to share that $2.3b out over the 556,500 residential properties in Auckland. The bulk of this is done using property values.
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The rates for a typical urban house are made up of nine charges. Five of these are the same for every regular house and total $1042.57. The rest of your rates bill will be 0.235068% of the value of your property.
A hypothetical property worth nothing would pay rates of $1042.57. But properties are not valued at $0. There was a house in New Windsor with a value of $0 and a rates bill of $1042.57, but in another reminder to check your rates bill, this has been amended.
If your property is worth $1m, your rates will be made up of the fixed $1042.57 plus $2350.68 (0.235068% of $1m). This is a total rates bill of $3393.25. There are 5455 houses in Auckland with a $1m value and rates of $3393.25.
Similarly, a $2m house would pay rates of $5743.93, and 1106 $2m houses in Auckland do.
There are 3139 $1m houses for which rates are not $3393.25. Lots of things result in variations to rates. Most often these are different rubbish collection regimes or local-board specific charges. For example, Rodney properties pay a fixed “Rodney Local Board Transport Targeted Rate” of $150.
My property’s value fell 3%, what does that have to do with my rates?
The short answer is nothing. Your current rates only depend on the current value of your property and the fixed charges.
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Generally, if the council decides to increase the amount collected in rates, your rates will go up regardless of what has happened to the value of your property.
Your property’s change in value only impacts how much your rates change compared to the rest of Auckland. Your rates will increase by more than your neighbours’ if your property value has increased more, or fallen by less, than those same neighbours’ property.
The council said 5.8% but my rates have increased by 15.8%
Last year in a 6.8% residential rates rise, the council distributed $2.1b in residential rates across 547,500 properties. Capital values hadn’t changed so most ratepayers’ rises were close to the signalled 6.8%.
This year, property values fell by an average of 9% across the city. However, a fall in property value does not mean a rates decrease.
Rates depend on how much money the council is going to collect in rates, and your share is determined by the current value, type and location of your property. Your change in rates includes both how your change in value compares with the rest of the city and the additional rates revenue the council is collecting.
Roughly speaking, if your value change is something close to the average of -9%, you can expect your rates rise to be about 5.8%. But just as there is a wide distribution of value changes around -9%, there is also a distribution of rates changes. This year, most of the changes are spread across a range from -5% to +20%.
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If your property’s value fell more than 9%, your rates rise will likely be less than 5.8%. The rates bill decreased for about 68,000 Auckland houses. The value of these properties fell by an average of 23%.
The council’s modelling estimates that when the impact of new rates-funded refuse collection in Franklin and Rodney is removed, half of Auckland’s residential properties had a rates rise below 5.8% and half had a rise above that figure.
If your property value is unchanged, you are well above the average change of -9% and can expect your rates rise to be above 5.8%. There are about 25,000 Auckland houses with unchanged values and their average rates rise is 15.8%
What assistance is available?
The council encourages anyone concerned about paying their rates to contact them as a range of assistance options are available, including a government-funded rates rebate scheme and a rates postponement scheme for residential properties.
Chris Knox is a scientist turned data journalist who investigates the stories behind the numbers and creates interactives for the Herald’s readers to explore them.
