Rates Capping
What has been announced
The Government has proposed a cap on council rate increases, targeting a range of about 2 to 4 per cent per year. Councils would generally not be able to raise rates above the upper limit without approval from a new regulator. The cap would cover general and targeted rates, but not water charges or other fees.
How it is intended to work
The aim is to keep rates affordable for households while ensuring councils can fund essential services. Councils needing to go above the cap would need to apply for approval and show how they will return to within the target range over time.
Impact for councils
Councils may face tighter budgets under the cap. They may need to find savings, adjust long-term plans, or explore other funding sources to maintain services and infrastructure while staying within the rate limits.
Our submission
Click here to read our submission
Next steps
Consultation on the proposal runs through early 2026, with legislation expected later that year. The system would begin from 1 January 2027, with the full regulatory framework operational by mid‑2029.