Changing how rates are set for waters services

There is no change to the average rates increase for existing ratepayers in 2025/26. This remains 15.5% as set through the 2024-34 Long-Term Plan. 

However, there would be some minor changes for individual properties because the proposal would change the way rates are split across property types. 

Some types of properties will receive a small increase compared to what was proposed in the Long-Term Plan. Other types will see a decrease as they are not connected to one or more waters services. 

Our proposal would mean the least change to the amount that properties pay for their water services (while still meeting the government’s new requirements). 

It depends on what type of property you have, and the waters services you receive. 

The vast majority (91%) of residential homes in Hamilton receive water and wastewater services (drinking water to your taps and toilets that flush into the sewer system), and this is paid for through the ‘general rate’. 

The general rate funds most of the services you receive from Council (like roads, community services, parks – as well as waters). It’s like a household having one main account that pays for all of its expenses. 

For a median value home, the ‘general rate’ makes up about 73% of the total rates bill. The rest is made up of the Uniform Annual General Charge (23%) and Government Compliance Rate (4%). 

To meet the new government requirements described above, we propose to introduce separate rates for each of these waters services – drinking water supply, wastewater, and stormwater. These rates would appear as separate line items on rates bills. 

This proposal means the least change to the amount that properties pay for waters services and also makes the cost of water, wastewater, and stormwater much more transparent. It’s like having separate household accounts to pay for your groceries, electricity, and insurance. 

The separate targeted rates would be set in exactly the same way the general rate is set now – by capital value. 

Council is also proposing to remove the current Government Compliance Rate. That’s because much of the activity funded from this rate already helps pay for waters activities. The waters portion of the Government Compliance Rate would become part of the proposed new separated waters rates. 

From 1 July 2025, two things would change on your rates invoice. 

You would see up to three new itemised rates for waters services, depending on the waters services your property receives: 

The portion of your rates that goes toward the general rate would be reduced – by the same portion that would go towards the new separated waters rates you’d pay. 

For a median value home, the new general rate portion would be about 45% of your total rates bill. Previously the general rate portion would have been about 73% of your rates bill. 

Money that currently goes towards the Government Compliance Rate would be spread across the general and separated rates (noting most of that money helped pay for waters services). 

There are no other financial tools Council can use now to separate the costs and funding for waters services. 

Currently rates in Hamilton (and across most of New Zealand) are set according to the capital value of a property. For the new separated waters rates, Council is proposing the same approach. 

Essentially this would mean a property’s rates are set in the same way as previous years, except that the three separate waters rates would be lifted out of the general rate portion and listed individually. 

Visit our rates calculator at hamilton.govt.nz/ratescalculator to see what the proposed rates would be for your property. 

Yes, and Council has considered them, including setting rates using a fixed amount (fixed rate) per property. However, this would see many households paying more compared with setting waters rates using capital value. You can see the impact of using a fixed rate compared with capital value here by going to hamilton.govt.nz/31-october-2024-open-agenda 

It depends on the waters services provided to the property. The majority of commercial and industrial properties in Hamilton already pay for drinking water by a volumetric charge (water metres). This won’t change. 

These properties would pay separated rates for wastewater and stormwater, also itemised on their rates bill. 

The commercial and industrial properties that pay trade waste charges would also continue to do so. 

• Introducing new, separate waters rates and removing the Government Compliance Rate would require a change to our Revenue and Financing Policy. There are also some minor changes to the wording of the policy. You can see a tracked-change version of the policy at hamilton.govt.nz/your-council-meetings-20march
• The reduction to the portion of the general rate for residential properties has a technical impact on the residential/ commercial rate differential. This reduction increases the differential, however, Council is not changing the make-up of total rates paid by commercial properties compared with residential.

Hamilton’s properties are being independently revalued this year, and those values will be used for rating purposes from 1 July 2025. (By law, properties must be revalued every three years).  

Some ratepayers may see their rates go up or down as a result of property revaluations. But the revaluation will not change the total amount of rates we need to collect from across the city. 

• meets the government’s new requirement to separate financial reporting for waters services
• property owners can see precisely how much of their rates bill goes towards each water service
• setting waters rates by capital value is consistent with current rating method
• capital value introduces the least amount of change to the rates for individual properties.