Your rates, explained

05/05/2022 4:27pm

Rates are the main way councils fund the activities they carry out to keep a city running.

The rates you pay generate around half of Council’s annual income and are used to provide residents with a wide range of essential services and facilities.

Your rates are made up of three components:

  • Uniform Annual General Charge (UAGC): This is a fixed payment that Council uses to cover charges for services most residents benefit from, such as roads or pest management. The amount of the UAGC is the same regardless of your land value, so everyone pays the same amount.
  • General rates: In Nelson, general rates are based on the value of your land, both commercial and residential, and don’t include the value of your house or any other structures on the property. They are set on a “cents in the dollar” formula, so for every dollar your land is worth you pay a certain amount. If your land was hypothetically worth $250,000 and your house was worth $300,000, your general rates would be calculated on that $250,000. If the value of your land changes, your general rates will be adjusted accordingly.
  • Targeted rates: “Targeted rates” means that this portion of your rates is earmarked to fund a specific function or group of functions. Nelson has targeted water rates that include a fixed cost for stormwater and flood protection; a fixed cost for wastewater disposal; and a fixed daily charge for water supply paid by all ratepayers with a water meter.

Rates for 2022/23

In September 2021, Quotable Value Ltd (QV) carried out an independent rates revaluation for all Nelson properties. A revaluation rating is typically carried out on all New Zealand properties every three years.

Your revaluation has three parts: capital value (an assessment of the probable value for the property as at 1 September 2021); land value (the probable value that would have been paid for the land as at 1 September 2021); and the value of improvements (the difference between the land value and the capital value).

You may already have seen that residential land values in Nelson have increased by an average of 73% since 2018, when the last revaluation was carried out. In January 2022, you should have received a Notice of Rating Valuation in the post with an updated rating value for your property, which will be available online by the end of May. Council will start using these new land valuations to calculate rates from 1 July 2022.

Although Nelson City Council has set the average increase in rates for 2022/23 at 5.4%, below the rate of inflation, the exact amount your rates will change depends on several factors, including QV’s valuation of your property.

If your land value increased by more than 73%, you may see that your rates have increased by more than 5.4%. Conversely, if your land value has increased by less than 73% your increase may be below 5.4%, or your overall rates may decrease.

Even if your rates have increased, this doesn’t mean Council’s total income is going up: it just changes the proportion of its income paid by a given ratepayer.

We know that rate increases can place a financial burden on households. Council has worked hard to keep these increases to a minimum while still delivering services to the community.

Once the Annual Plan 2022/23 is adopted, we will write to the most affected households to outline the financial assistance that is potentially available. This includes payment plans, the rates rebate scheme and rates postponement in some cases.

To enquire about a rates issue, please contact Nelson City Council on 03 546 0200 or