New rating system proposed for New Plymouth district

New Plymouth mayor Neil Holdom could become a modern-day Robin Hood if a new rating system is introduced.

The proposed system, set out in the New Plymouth District Council’s draft 10-year Long Term Plan, has been designed to make sure ratepayers who own more expensive land pay more when rates rise than those living on properties worth a lot less.

The council plans to reduce the uniform annual charge each ratepayer paid from $340 to $150 next year, with the charge dropping to $100 in 2026.

The shortfall from the uniform annual charge would then be made up from residential properties with higher values.

“Generally, it’s those with the lowervalue properties who are struggling the most and so, by reducing that annual uniform charge, we basically make a more progressive tax system,” Holdom said.

“I think it’s an improvement on the system we had and I’m interested to see what the feedback will be.

“I think a progressive tax system where those who can afford to pay more do pay more and those who can’t afford to pay end up paying less reflects the value of New Zealand society.”

The council provided examples of what it would cost in the draft Long Term Plan. A residential ratepayer, who owned land valued at $320,000, would pay $1310 in general rates, while a residential ratepayer with land valued at $790,000 would pay $3234.

All residential ratepayers would pay the same uniform charge for roading, sewerage, stormwater and refuse.

The same value increases were also applied to commercial and industrial landowners, although some uniform charges varied the more valuable the property was.

The proposed rating system was also designed to even out payments across residential, commercial and farm properties.

It adjusts the rates differential so that home owners collectively contribute a larger share and commercial and farmland property owners a smaller share than they have in the past.

“The old system had been in place for more than 20 years and what it really did was allocate a higher share of rate increases to farms and commercial or industrial land,” Holdom added.

“Basically, if rates went up 10%, they went up more than 10% on farmland and commercial and industrial buildings and less on residential properties. So we’ve updated the system now so that residential rates will increase more than the average.”

Holdom said the old system set a percentage of rates to be covered by residential, commercial and farmland owners.

However, since that system was introduced the proportion of land zoned in each one of those categories had changed.

“By making these changes, we believe it will be more fit for purpose now and into the future and there will be less of those rate shocks if we have another surge in property values,” Holdom said.

While rates were still linked to land values, which were independently assessed every three years, the reduction of the uniform annual charge would allow council to charge higher valued landowners more in their general rates.

Under the draft Long Term Plan, New Plymouth ratepayers were facing an average increase of 9.9% for 2024/25. Feedback on the draft plan closes at 5pm today, with the council to hear submissions in May.