Wellington City Council is accepting public feedback until November 15 on a potential shift from capital value to land value rating systems, a proposal that has drawn sharp criticism from local business owners who warn of steep cost increases.
Council Consults on Shifting to Land Value Rating
Wellington City Council is currently consulting on changing how it calculates property rates from a capital value to a land value based rating system. Capital value rating assesses rates based on the value of someone’s land and buildings, whereas a land-value system assesses only the value of the land itself.
Proponents of the shift argue it incentivizes growth and targets land-banking in the city. Greens councillor for Wharangi/Onslow-Western ward Rebecca Matthews, who has been pushing for the change for six years, said that the policy aims to drive affordable housing development in the inner city and revitalize Wellington.
Mayor Andrew Little said that the council launched the consultation to gather views on an issue that has lingered in the city for some years. Little did not express a preference for either rating system, emphasizing that he wants a fair model that avoids discouraging necessary development.
Consultation on the proposals closes November 15, with councillors scheduled to discuss the feedback next month.
Business Owners Alarm over Inaccurate Rates Calculator
Local business owners have raised alarms over the council’s online calculator tool for the proposed rating changes, which they say created community shock because it did not factor in a separate council proposal to reduce commercial rates. Trinity Group director Jeremy Smith, who was also on the board of Hospitality NZ, argued that if the council was considering lowering commercial rates, it should have “absolutely” factored that into the calculator.
Smith calculated that his bar Lulu on Courtenay Place could see its annual rates jump from $68,000 to $170,000 under the land-value system—an increase of $102,000. He characterized the overarching shift as “absolutely crazy”, “ridiculous”, and “ludicrous” after crunching the numbers for his Courtenay Place operations, where he warned businesses are struggling to survive.
He added that the calculator indicates high-rise office buildings such as the Majestic Centre could secure over $700,000 in savings, and the Deloitte high-rise could see over $1 million in savings, leaving smaller property owners and tenants heavily penalized.
At Moore Wilson’s, a food and grocery outlet that has been at the heart of the capital’s food scene for over 100 years, Director Julie Moore said that the proposed change would increase its rates by $500,000 a year. Moore described the proposal as “not sustainable” and “a kick in the guts for the council to even propose this”, noting that business is already difficult.
Fergus Kisby-Macleod, general manager of the Penthouse Brooklyn Cinema, said that council calculations show rates for the cinema and adjoining carpark could increase by over $77,000 per year under the land-value system.
Kisby-Macleod noted the business would need to sell roughly 600 extra ice creams and 80 additional tickets every week just to cover the added costs, warning that the potential increase could force the cinema to close, raise ticket prices, or shorten operating hours.
We’ve never really wanted to change operating hours because we’re trying to be a community venue and stay open seven days a week, but with these bottom line costs going up – just to open the doors in the morning before you’ve even started – to get another setback it makes it very hard to justify certain costs of opening for the day.
Fergus Kisby-Macleod, general manager of Penthouse Brooklyn Cinema
Councillor Disputes Policy Focus Amid Donation Scrutiny
The review has generated divisions around the council table. Wharangi/Onslow-Western Ward councillor Diane Calvert criticized the focus of the policy review, stating that the city “has more pressing problems” to address and needs to get the economy thriving.
Meanwhile, questions have been raised regarding political donations connected to the rating policies review. Documents revealed that nine city councillors—including Deputy Mayor Ben McNulty and former deputy Laurie Foon—received financial donations from an individual associated with Common Ground Aotearoa, a lobby group advocating for the land-value rates system. Other councillors, including Andrea Compton, have voiced concerns regarding the source of these donations.
Mayor Little encouraged public participation in the closing days of the consultation period, stating, “Get your submissions in, that’s the way we get to make a good decision,” while noting that the council “just don’t know” whether land-value rating is fundamentally fairer for the broader community.
