Rates cap excludes water charges and will not fully apply until 2029

Summarised by Centrist

The government has confirmed plans to limit annual council rates increases to a target range of 2% to 4%, but water services will remain outside the scheme and the cap will not take full effect until July 2029.

Councils will be required to start considering the target range from July 1, 2027. An independent regulator will oversee the system, while the range will be reviewed every six years to account for costs outside councils’ control.

Exemptions will be available in exceptional circumstances, including natural disasters, or when a council can demonstrate prudent financial management and a justified need to operate above or below the target.

“Exemptions will not be granted lightly and will only be available in exceptional circumstances where there is strong justification,” Local Government Minister Simon Watts said.

The government says the policy responds to median rates increases of 14.2% and 9.2% over the past two years.

“This rates cap is about driving greater fiscal discipline, keeping rates affordable, and ensuring councils are focused on delivering the services ratepayers rely on,” Watts said.

He said councils should concentrate on core services such as fixing roads, collecting rubbish and operating pools and parks.

The target range will also contain a minimum increase intended to cover service delivery and infrastructure investment. Water services are excluded because they will continue to be regulated separately.

Read more at 1News

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