Pain and gain: Who will bear the brunt of new Auckland Council rates charges?

New rates bills released today are likely to hit the pockets of lower-income families in the city’s south and west hardest at a time of already sharply rising costs.

That is because house prices in the western Waitakere and southern Papakura and Manukau regions have typically risen faster than other parts of the city.

It means most homeowners in the city’s south and west can expect their rates bills to jump by between $200-$350 this year – or more than 7 per cent.

They’ll now typically have to fork out between $2600 and $3600 to the council in rates bills each year on top of finding cash for rising petrol and food costs.

Māngere, Māngere Bridge, Favona and Otahuhu homeowners face the city’s biggest percentage increase – apart from the small population on Aotea-Great Barrier Island – whose bills jump 13.3 per cent or $346 this year.

Yet, by a separate “affordability” measure, it is arguably the residents of New Lynn and the Henderson-Massey areas who will suffer most.

Auckland Council’s affordability measure works out what percentage of a typical household income is needed to pay for council rates and water charges.

It shows residents in the Whau local board – that includes New Lynn Green Bay, Kelston, Rosebank, Avondale, New Windsor and Blockhouse Bay – are likely among those being hit hardest.

Owners in these suburbs will now on average pay 10 per cent higher rates bills this year.

And given that household incomes are estimated at almost $100,000 in the area, owners will now typically have to spend 3.8 per cent or $3800 of their income paying yearly rates and water bills.

That is the third-worst affordability ranking in the index.

And it combines with families in these areas facing one of the sharpest rate increases anywhere in the city while typically earning among Auckland’s lowest incomes.

Similarly families in the Henderson-Massey local board – including suburbs West Harbour, Massey, Ranui, Glendene, Lincoln, Henderson South, Sunnyvale, Te Atatu Peninsula and Te Atatu South – earn some of the lowest incomes but are experiencing a sharp rates rise.

Rates are jumping 13 per cent in the area, leaving homeowners to now pay $3500 in council and water charges each year – or 3.5 per cent of the area’s typical $100,000 household income.

Auckland mayor Phil Goff earlier played down the prospect of higher rates in lower-income areas.

He said a much higher percentage of the population in these suburbs are renters rather than homeowners, either with Kāinga Ora or the private sector.

“The rates in those cases are paid by the landlord and are either income-related in the case of Kāinga Ora, or based on the market and not on the landlord’s costs,” he said.

Overall, Auckland Council is aiming to increase the average household rate by 6.09 per cent for the next budget.

That is made up of a 3.5 per cent general rate increase and a 2.4 per cent climate change targeted rate.

It means that just under 50 per cent of Auckland homeowners will have rates charges at least 6 per cent higher than last year.

Auckland Council estimates 373,555 property owners in total will have to pay higher bills this coming year, while 138,275 will see their bills go down.

Of those facing higher bills, 234,196 will have bills rise by less than 10 per cent.

A further 138,275 will have rates charges rise by more than 10 per cent, council said.

According to council’s affordability index, Waiheke Island residents are set to pay the highest local government and water charges as a percentage of household income.

Owners on the island will have rates and water bills adding up to 4.77 per cent of the island’s typical $81,744 income.

This is likely to hit hard for any Waiheke residents who own their own home without earning a big income.

Though it’s also likely that other Waiheke Island homeowners will be wealthier Kiwis, who use their homes as baches or rentals.

Owners in the Ōrākei local board, meanwhile, will pay the largest rates bills by dollar value as they will now need to pay an average of $5,169 each year.

The local board is home to some of the city’s wealthiest homeowners in the suburbs of Ōrākei, Mission Bay, Kohimarama, St Heliers, Glendowie, St Johns, Stonefields, Meadowbank, Remuera and parts of Ellerslie.

Homeowners will have to pay the new rates charges in the 2022/2023 rating year beginning from July 1.

CVs are used as a measure to set rates, but they do not change the total dollar amount the council collects from rates.

Instead, the council decides how much money it wants each year, and then uses CVs to help work out the share each home and commercial property owner pays.

Property owners will receive valuation notices in the mail, including information on how to object to their CV valuations, from next week, council said.

Information on how to object to a home’s valuation can be found on the Auckland Council website.

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