Another rates hike on the horizon for Christchurch ratepayers

Monday, 10 November 2025

Christchurch City Council is projecting a rates increase of 9.2% next year, but this is likely to change before the annual budget is ratified in June.

The percentage of income Christchurch ratepayers spend on rates has doubled in 17 years, as they look to be saddled with a 9% rates increase next year.

The Government’s much-anticipated rates cap is not expected to provide any immediate relief, as it is unlikely to be in place before next year’s budget, the annual plan, comes into force on July 1.

Christchurch City Council has embarked on the early stages of planning the 2026/27 budget.

At a councillor briefing on Thursday, council finance staff said in 2008 the city’s rates made up 2% of the annual median household income. That figure is set to rise to 4% next year, rising to 5% in the 2030s.

This year rates for the average house, valued at $830,000, are $4232, following an overall 6.6% rates increase. A 9.2% rates increase next year could push that up to $4621, an increase of $389.

The council signalled in July that next year’s rates increase was expected to be 10.5%, but that has decreased to 9.2%, mostly due to lower insurance costs and underspending on its capital programme during the previous two financial years.

Almost a third of the increase is due to inflation and other reasons for the increase include the capital programme and renewing and replacing its water and transport infrastructure.

Christchurch City Council finance committee chairperson Sam MacDonald wants councillors to see modelling on the impacts of a possible rates cap.

About 2 percentage points is due to the council deciding earlier this year to use the 24/25 surplus to lower this year’s rates increase.

One New Zealand Stadium will contribute 1 percentage point to next year’s rates increase, despite it opening in late April, two months before the new financial year starts.

Council head of finance Bruce Moher said most of that 1%, which amounted to a little over $100m, came from money spent this year on the stadium.

He said the council did not know a lot about the Government’s potential rates cap, but was expecting an announcement from the Government before Christmas.

But even if that did happen, it would be unlikely to kick in for the 2026/27 year.

“It’s a wee bit of a wait and see at this stage. The impact could be material.”

He said if a rates cap was introduced the council might need to identify significant cost savings or other revenue.

A 5% rates cap from July 2027 would require a reduction in operational spending of about 6 to 12% from current levels, Moher said.

To reduce rates by 1 percentage point, the council would need to find $8.3m of operational savings, or $112m of capital savings. The capital figure is higher because the council borrows for capital projects, spreading the cost out over a number of years.

The council’s finance committee chairperson Sam MacDonald asked when councillors would see some modelling around what a rates cap might look like.

Chief financial officer Bede Carran said staff had done some modelling around rates capping, but without the full information it could be misleading.

MacDonald asked if councillors could still see the modelling to begin the conversation about how it was going to meet a cap.

Another issue impacting rates next year is the revaluation of properties, which is done every three years. Revaluations will be issued in January and will apply from July 1, 2026.

Councillors will now meet weekly until December 11 to discuss next year’s budget so staff can formulate a draft annual plan ready to be adopted for consultation in February.