Rates - Frequently Asked Questions
This page answers rates questions that we're often asked. You can also view our video explaining how rates are decided.
Q1. Why are rates high in Porirua?
A. Population size drives most costs for Councils. Porirua City Council 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. Our Council 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.
Q2. How do our costs compare with other councils?
A. 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.
Q3. What do our rates pay for?
A. Property rates provide for services like parks, playgrounds, sports grounds, cemeteries, walkways and network infrastructure for drinking water, sewage disposal, storm water, roads, footpaths etc. User fees also contribute to funding many services like resource consents, building consents, kerbside rubbish bags, pool entry and facility hire.
Q4. What is the rates increase for this year?
A. For the 2016/17 year, average property rates increased by 3.3% compared to last year. This figure is reduced from the 5.03% rise forecast in the Long-term Plan 2015-25. This smaller increase has demanded cutbacks in some areas, including decisions to:
- Discontinue inorganic Waste collection for households
- Close the Porirua Main library and Cannons Creek Pool on public holidays; and
- Reduce spending on gardens/landscaped areas.
We have some big projects to do, including further changes in the City Centre, a wet play area and sound stage at Aotea Lagoon, a diving platform at Paremata, development of the Porirua Outdoor Recreation Park on our Western hills, plus investing $18 million in our core infrastructure for transport, water supply, stormwater, wastewater and treatment plant improvements. See more about the Annual Plan for 2016/17.
Q5. What other costs have changed in the last year?
A. The Council needs to absorb high costs such as earthquake strengthening public buildings, paying more to Greater Wellington for our water supply and higher costs at the wastewater treatment plant and landfill to manage odour issues.
Q6. How do Porirua rates compare to Wellington?
A. There is little difference between residential property rates when comparing the average-priced home in each city. The proportion of rates paid by an individual property owner is dependent on the Capital Value of the property compared to all other properties in the same city. Your property value determines the share of the rates you pay relative to other property owners across the city. An important difference is that Capital Values are much higher in Wellington. So $560,000 would buy an average value home in Wellington, but a house much further up the value scale in Porirua. Consequently a $560,000 home in Porirua would pay a higher proportion of rates than the average-priced home of $381,000 in Porirua City.
Q7. Why do our rates increase every year?
Average Capital Value (15/16)
Rates (excluding GWRC) 15/16
|Porirua City Council
|Wellington City Council
A. 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 etc determine how much money the Council needs to collect. Unexpected demands like increased costs for insurance and inflation also add to annual rates increases.
Q8. What does rating for depreciation mean?
A. The current and future ratepayers each pay their fair share of the cost of the Council’s assets (eg 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.
Q9. What does having a balanced budget mean?
A. 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.
Q10. Why do the rates increase when the value of my property doesn’t increase?
A. 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.
Q11. How do you calculate the share each ratepayer has to pay?
A. This is calculated on the value of your property in relation to the average property value in the city. If the average rate increase is 3% and your house has increased in value less than the average Porirua property, then your rates increase will be less than 3 %. Conversely, if the value of your house increases above the average property value, then your rates increase will do likewise.
Q12. How are properties valued?
A. The Council contracts Quotable Value to perform property revaluations every three years. The latest revaluation has been 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 do not include chattels such as carpets, drapes or light fittings. The revaluations notices have been sent out as from 28 November 2016. If you do not agree with the value, you can object. The objection period closes after 13 January, to find out more check out the Property Valuations page.
The new property values for all properties are loaded as Future values on the RID. The final values after the objections have been considered by Quotable Value will be updated on the RID as at 31 May 2017. These final values will be used for rating purposes for the 2017/18 year commencing 1 July 2017.
Q13. Does Housing NZ pay rates on their properties?
A. 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.
Q14. Why were the instalments changed from five a year to four a year in July 2015?
A. The change occurred in July 2015 to shift payments into traditional quarterly periods and move the mid-January payment out of the busy Christmas holiday period when people often forgot to pay and then incurred a late payment penalty. It was also done to cut costs and save ratepayer money.
Q15. Can we receive our rates bill’s via email?
A. Yes. Simply email firstname.lastname@example.org advising them that you would like to have your rates invoices emailed, detailing the property account number or address and confirming the email address to be used.
Q 16. 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.
Q17. 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 make sure Porirua is a great place to live, work and raise a family. The Council provides many great amenities across the city - such as walkways, parks, sports fields, libraries, swimming pools, Te Rauparaha Arena, Pataka and more. There are other important areas the Council contributes to, like protecting the harbour and streams, enhancing the city centre and villages, and supporting the growth of the 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. Rates are a key source of funding for the on-going maintenance and renewal of these assets. Rates also help to fund the depreciation of Council assets - in order to fund future renewal of the city’s assets.