Rates - Frequently Asked Questions

This page answers rates questions that we're often asked. You can also view our video explaining how new house values affect rates.

Q1. What do our rates pay for?

Property rates pay for services like parks, playgrounds, sports grounds, cemeteries, walkways and network infrastructure for drinking water, sewage disposal, storm water, roads and footpaths. Fees paid by users also contribute to funding many services – like resource consents, building consents, kerbside rubbish bags, pool entry and venue hire.

Q2. What are the rate increases for this year?

For the 2017-18 year, average property rates increased by 4.9% compared with last year. But it’s also a revaluation year, with an average property valuation increase for Porirua of 24%. This doesn’t mean your rates bill will go up by the same amount, but it is a factor in working out what your rates will be.

Q3. What other costs have changed in the last year?

The big storm and earthquakes in November gave us quite a big clean-up job and we’re still going. Cleaning up has meant we’ve needed to spend a bit more than we’d planned. The earthquake and storm will end up costing the city an extra $3.74 million.

We’re also looking differently at how prepared we are for natural disasters and are working with others in the region on long-term resilience plans. This includes ongoing investment in wastewater, stormwater, water supply and roading.

Q4. How are our rates determined?

It’s a three-step process:

  1. We determine how much money we need to fund all our services.
  2. We then deduct the income we receive either through fees and charges like entrance fees to the pools and the Arena, or through dog registration and other regulatory fees – as well as any other income like NZTA subsidies.
  3. This leaves a shortfall that we need to meet from rates and we spread this rate requirement across the residential, commercial and rural sectors.

This year’s rate increases is more complicated because property revaluations will be factored in to the equation.

Note: revaluations don’t result in the Council receiving any more or less income, they change the proportion of overall rates each person or business pays.

Q5. How are properties valued?

We contract Quotable Value (an independent contractor) to carry out property valuations every three years, with the latest undertaken as at 1 September 2016.

Quotable Value determines the value of your property by looking at the selling price of similar properties in the area. Valuations don’t include chattels such as carpets, curtains or light fittings. The revaluation notices were sent out in November 2016 and people had until 13 January to object. To find out more check out the Property Valuations page.

The new property values for all properties are loaded as future values on the Rating Information Database (RID). The final values (after the objections have been considered by Quotable Value) will be updated on the database by 31 May 2017. These final values will be used for rating purposes for the 2017-18 year, which starts on 1 July 2017.

Q6. Do higher valuations mean that the Council gets more income?

No, revaluations don’t result in the city receiving any more or less income.

Q7. How do you calculate how much each ratepayer has to pay?

It’s calculated on the value of your property in relation to the average property value in the city. If the average rate increase is 5% and your house has increased in value less than the average Porirua property, then your rate increase will be less than 5%. On the other hand, if the value of your house increases above the average property value, then your rate increase will also be higher.

We contract Quotable Value (an independent contractor) to carry out property valuations every three years, with the latest undertaken as at 1 September 2016.

Quotable Value determines the value of your property by looking at the selling price of similar properties in the area. Valuations don’t include chattels such as carpets, curtains or light fittings. The revaluation notices were sent out in November 2016 and people had until 13 January to object. To find out more check out the Property Valuations page.

The new property values for all properties are loaded as future values on the Rating Information Database (RID). The final values (after the objections have been considered by Quotable Value) will be updated on the database by 31 May 2017. These final values will be used for rating purposes for the 2017-18 year, which starts on 1 July 2017.

Q8. How are you proposing to rebalance the rates?

We’re consulting on three options to rebalance the rates in our proposed Annual Plan, along with one option to make no changes. Without rebalancing rates, homeowners would pay $750,000 more in rates, while rural and commercial property owners would pay $750,000 less.

Because residential capital values have risen more than commercial property and rural values, we’re proposing charging a City Development Rate on all commercial properties and increasing the base rate applied to rural properties (from 70 percent of the current residential rate to 75 percent of the residential rate).

We’re also proposing reducing the Uniform Annual General Charge from $419.65 to $390.27 per property. This is a fixed amount charged per property (whereas targeted rates are levied to pay for specific services like kerbside recycling).

You can read more about the four options in the proposed Annual Plan and have your say until 1 May 2017.

Q.8.a What are the rating impacts on the Residential section of the 4 options?

Option 1 – Status Quo – Revaluation effects only + 2017/18 Rates increase 4.9%
Option 2 – City Development Rate $500k, Rural Differential increase from 0.7 to 0.75 + 2017/18 Rates increase 4.9%
Option 3 – City Development Rate $1m, Rural Differential increase from 0.7 to 0.75 + 2017/18 Rates increase 4.9%
Option 4 – Option 3 + reduction in Uniform Annual General Charge from $419.65 to $390.27

 

No. of Residential Properties with Rates increases > 10%

Suburbs

Option 1

Option 2

Option 3

Option 4

Aotea

23

18

16

17

Ascot Park

39

22

15

14

Camborne

422

368

267

266

Elsdon

93

55

40

20

Mana/Paremata

60

46

43

36

Papakowhai

222

167

120

81

Plimmerton

87

67

50

38

Porirua East/Ranui Heights

201

134

110

68

Pukerua Bay

451

397

294

240

Titahi Bay/Onepoto

305

209

151

96

Waitangirua

559

483

425

101

Whitby

1398

1257

1072

992

Total

3860

3223

2603

1969

Q9 How can I have my say about the four options proposed?

You can give feedback until 1 May by:

  • filling in an online questionnaire
  • picking up a questionnaire from our libraries or Council office reception
  • emailing annualplan@pcc.govt.nz
  • writing to us: Annual Plan, Porirua City Council, PO Box 50218, Porirua 5240.

Q10 How does the proposed 4.9% rates rise compare with the forecast?

This figure is reduced from the 5.03% rise forecast in the Long-term Plan 2015–25.

Q11 Why do our rates increase every year?

The Council sets its budget every year following consultation with the community. New activities and the quality or quantity of our services – eg standards of our roading, rubbish collections – determines how much money needs to be collected. Unexpected demands like increased costs for insurance and inflation and clean-up costs related to storms also add to annual rates increases.

Q12 Why do the rates increase even when the value of my property doesn’t increase?

Your property value only determines the share of the rates increase that you will pay relative to other property owners in the city. If the value of your property decreases, it still costs us the same amount (or more depending on inflation) to deliver the same services.

Q13 How much do you need to collect in rates?

After paying for the services we provide across the city and receiving income from fees and charges, we have a shortfall of $60 million. Around $600,000 of this will be paid by new ratepayers, with the balance to be paid by our existing ratepayers.

Q14 Why are rates high in Porirua?

Population size drives most costs for councils. Porirua City has to provide services and infrastructure for over 54,100 residents. Because we have many large households and fewer businesses compared to other cities with a population our size, there are fewer ratepayers footing the bill. Porirua also has fewer sources of income like airports, ports, trusts and property portfolios to reduce the rates burden. In fact 74% of Porirua’s cash revenue comes from rates, compared to 54% on average across other councils in New Zealand.

Q15 How do our costs compare with other councils?

Our service delivery costs are very similar to our neighbouring councils, for things like mowing, resealing roads and laying pipes. We tender for contractors and operate a range of shared services with other councils – so our costs tend to align closely across the region. The same is true for user charges, like pools, libraries, landfill, facility bookings, etc.

Q16 Why is there such a high annual increase each year?

In our Long-term Plan for 2015–25 we committed to balancing our budget, rating for depreciation and spending an additional $40 million in the city’s infrastructure. This alone results in an average rate increase of about 3.75% for the next four years (before we add any increases to the cost of providing services).

Q17 What does rating for depreciation mean?

The current and future ratepayers each pay their fair share of the cost of the Porirua’s assets (e.g. water, wastewater and roading assets) over the assets’ useful lives, so that the replacement costs are met by those ratepayers who have benefited from these assets. If current and future ratepayers do not each pay for their share then an unfair debt burden will be placed on the other group.

Q18 What does having a balanced budget mean?

Having a balanced budget means Council’s spending matches its income and so doesn’t create a deficit that needs to be funded by future generations. Rating for depreciation, investment in infrastructure, and balancing the budget alone results in an annual average rates increase of 3.75%.

Q18.a Why does Council need to have a balanced budget?

Councils operating revenue needs to match its operating expenditure (non-capital) otherwise it will result in a shortfall or deficit i.e. an unbalance budget.

The Local Government Act 2002 Sec 101 “Financial Management” requires Council to manage revenue, expenses, assets, liabilities and investments prudently in a manner that promotes the current & future interests of the Community.

Also Councils must make adequate & effective provision in its Long Term Plan (LTP) & Annual Plan to meet the expenditure needs of the Council as identified in the LTP & Annual Plan.

Q19 Can we receive our rates bills via email?

Yes, just email rates@pcc.govt.nzto let them know that you’d like to have your rates invoices emailed. Include the property account number or address and confirming the email address to be used.

Q20 Can I pay my rates online?

You can pay your rates by direct debit, credit card, telephone and internet banking, automatic payment, EFTPOS, cheque or cash. See Rates Payment Options for details.

Q21 What are rates from new housing developments used for?

The rates received from new houses when first built does not represent “free cash” for councils. The money is put to work straight away to provide amenities across the city – such as walkways, parks, sports fields, libraries, swimming pools, Te Rauparaha Arena and Pātaka. It’s also used for important strategic things like protecting our harbour and streams, enhancing the city centre and villages, and supporting the growth of our local economy. All ratepayers – both existing and new – contribute to the annual costs of providing these services.

Generally as part of new developments, councils “inherit” basic infrastructure assets from developers (roads, footpaths, street lighting, water pipes, reserves) which councils then need to maintain. The cost of expanding the capacity of these Council assets to cope with increased demand from new properties is helped through development contributions for reserves, water, wastewater, stormwater and roading.

Q22 Does Housing NZ pay rates on their properties?

Housing NZ pays rates based on the value of their properties just as other ratepayers do. This includes properties that are not currently occupied by tenants. We are sometimes asked if Housing NZ (and other government departments) that own property in Porirua pay GST on their rates? All property rates include GST and there are no exclusions.

Q23 How are retirement villages and rest homes rated?
Retirement Villages and rest homes are rated as residential properties and are included in Group 01 – Residential category for General rates.

Q24 What are the key components that the proposed $1m City Development Rate would be funding?

17/18 budget
$000

Portion funded from
City Development Rate
$000

Economic Development group of activity
City Centre Revitalisation
Sister Cities
City Promotion (including Community Events, Economic Development, City Growth & City Promotion)
Subtotal


1,407
59
2,079

3,545


365
15
540

920

Stormwater
Debt servicing on new stormwater improvements in commercial areas enhancing business development

50

13

Village Planning
Debt servicing on improved facilities in suburban village areas

250

67

Total

3,845

1,000