How Rates are Calculated and Spent

Rates affordability

What’s new in 2024/25?

Like all councils in New Zealand, we face rising costs due to inflation, high interest rates and more expensive insurance. Plus, the Nelson region is recovering from a severe weather event.

The August 2022 weather event had a major impact on finances. Council is building back better to make our infrastructure more resilient. The estimated cost is $87.2 million, with some paid for by insurance and central government. That leaves about $60 million for us to pay.

Council is keenly aware of the pressure on everyone’s finances. Our plan is to keep rates rises as low as possible while maintaining core services, paying for recovery, and continuing to invest in projects that make the most difference to Nelson’s future.

With all this in mind, the average rates rises were this year will be 8.2% plus a $300 (including GST) Storm Recovery

How rates are calculated

A breakdown of current rates, separate charges and how your rates are calculated. Rating valuations (formerly known as Government Valuations) are primarily undertaken to allow the Council to determine a property's rates. Rates are calculated on the land value of all properties in the Nelson City Council rating area and are like a property tax which provides revenue for the Council.

For the current year, rates are calculated on the revaluation that took place on 1 September 2021.

In accordance with Section 23(5) of the Local Government (Rating) Act 2002, Council's 2024/25 Rating Resolution (125KB PDF) (Council Meeting, 27 June 2024).

More information can be found by doing a rates search.

Nelson's rating system

In Nelson City we set our General Rate based on the Land value, we also apply a portion of the general rate as a fixed uniform charge.

As part of the Annual Plan/Long Term Plan the ‘Funding Impact Statement’ sets out the rates and charges that are planned for the next year. Unless otherwise stated, rates and charges are shown including GST.

Total rates on each property in Nelson include payment for territorial authority (City Council) and Regional Council services. Nelson City Council is a unitary authority combining both of these functions. The final figure is made up of a combination of whichever of the following apply to your rating unit(s):

Rate types	Description	Factor
General Rate	The General Rate and Uniform Annual General Charge funds the cost of democracy and administration, managing emergencies, parks, and active recreation, social, economic, environments management and transport.	Land Value
Uniform Annual General Charge	The General Rate and Uniform Annual General Charge funds the cost of democracy and administration, managing emergencies, parks, and active recreation, social, economic, environments management and transport. The Uniform annual general rate is a fixed amount charged to all properties, without regard to the value of each property.	SUIP
Stormwater charge	The Stormwater Charge funds Council's costs of the collection and disposal of stormwater.	Rating Unit
Flood Protection rate	The Flood Protection Rate funds Council's cost for flood protection work.	Land Value
Storm Recovery charge	The Storm Recovery Charge funds the costs of the recovery of the 2022 weather event.	SUIP
Wastewater charge	The Wastewater Charge funds sewerage disposal for properties that are connected to Council's wastewater system.	SUIP
Water rates have two charges, the annual charge is invoiced via the rates notice, and the volumetric charges are invoiced separately via the water rates notice.
Water annual charge	The Water Annual Charge funds the supply of water and the water annual charge is included on the rates assessment. This is a uniform charge.	Metered Connection
Water volumetric rate	The volumetric usage charge will be shown on the separate water invoice	See Water Charges for information on charges for water supply.
If part of the rates postponement scheme:
Postponement application charge	There is an initial one-off application fee which includes the cost of Council registering the Statutory Land Charge on the property title	Service Provision/Rating Unit
Postponement administration charge	A yearly administration charge is payable by the property owner	Service Provision/Rating Unit
Postponement interest	Interest will be charged on the postponed rates six monthly at Council’s marginal rate (to cover the current cost to Council of borrowing the required funds) An additional annual reserve fund levy on the total rates that are postponed is payable by the property owner.	Service Provision/Rating Unit

Types of rates and their definitions

General Rate

The Land Value component of our General Rate is set on a differential basis, which adjust rates upwards or downwards, typically depending on whether more or less Council services are provided, for example commercial, rural or multi-unit properties.

Categories as follows:

Residential Multi
Residential
Commercial (Inner City, Stoke and other)
Rural Small holding

Properties that have more than one use identified above will be placed into a rating category subject to the rating unit’s majority use as determined by Council. The neutral base from which differentials are calculated is a residential property with a single dwelling.

Rating Divisions

For Commercial properties with a residential component the rates will be divided between each value and separate notices issued.

A Rating Unit is based on a Certificate of Title

In most cases a rating unit will be the area specified in the Certificate of Title. Exceptions may apply where a significant improvement straddles the boundary of two titles or where the titles are legally required to be sold together.

Rating of separately used or inhabited parts (SUIP) of a rating unit

A separately used or inhabited part of a rating unit includes any part separately used or inhabited by the owner or by any other person or body having the right to use or inhabit that part by virtue of a tenancy, lease, license or other agreement. This definition includes separately used parts, whether or not actually occupied at any particular time, which are used by the owner for rental (or other form of occupation) on an occasional or long term basis by someone other than the owner.

For the purpose of this definition, vacant land and vacant premises offered or intended for use or habitation by a person other than the owner and usually used as such are defined as ‘used’ by the owner for this separate purpose. For the avoidance of doubt, a rating unit that has a single use or occupation is treated as having one separately used or inhabited part.

The following are considered to be separately used or inhabited parts of a rating unit where the above requirements are met:

Flats or apartments (including flats that share kitchen or bathroom facilities) • Separately leased commercial areas of a rating unit
Where there is multiple use of a single rating unit, such as a shop with a dwelling.

The following are not considered to be separately used parts of a rating unit:

A residential sleep-out or granny flat without independent kitchen facilities
A hotel room with or without kitchen facilities
A motel room with or without kitchen facilities
A bed and breakfast room with or without kitchen facilities
Individual offices or premises of business partners
Individually leased carparks
Storage units
Properties subject to statutory declarations for unoccupied or second residential units not being used as separate units.

How rates are spent

The pie charts below show how rates are spent by Nelson City Council. More information can be found in the Long Term Plan 2024-34. Visit the Plans, strategies, policies section for earlier report.