Central Otago property owners will have their general rates calculated using capital value rather than land value from 1 July 2027, following a decision by the district council.
Central Otago property owners will have their general rates calculated using capital value rather than land value from 1 July 2027, following a decision by the district council.
Central Otago District Council has adopted Option A from its rating review, a proposal that also removes most rating differentials and simplifies what is included in the general rate.
The council says around 75 percent of ratepayers would be better off under the option. However, that does not guarantee their total rates bill will fall next year, because the amount payable will also depend on the council’s budget and other applicable charges.
What does the change mean?
Land value measures the value of the land alone. Capital value includes the land and improvements, such as buildings.
Moving to capital value means buildings will become part of the property value used to calculate the general rate.
The effect will vary between properties. The relationship between a property’s land value and capital value will help determine how its share of the general rate changes.
The decision concerns how the council distributes rates across properties. It does not, by itself, establish how much money the council will need to collect in the next financial year.
Council says most ratepayers will benefit
Mayor Tamah Alley said the council chose the approach it believed would benefit the broadest number of ratepayers.
“While we recognise there are winners and losers in every scenario, around 75% of ratepayers will be better off under Option A,” she said.
The council says using capital value expands the rating base, spreading costs more widely across the district.
Its decision followed consideration of financial modelling, evidence and the effects on different properties.
No additional business differential
Councillors considered whether business properties should face a separate rating differential, which would change their share of the rates burden.
They decided against introducing one, citing the contribution businesses make to the local economy.
Alley said the council wanted to encourage investment and growth rather than place a higher share of rates on businesses.
Although most differentials will be removed, individual bills will still vary according to property values and any other applicable rates.
Consultation drew 225 submissions
The rating review received 225 submissions.
Of those submitters, 57 percent selected either Option A or Option B, indicating support for moving away from the existing land value-based system.
That figure represents support for change across the two alternatives, rather than support for Option A alone.
Chief financial officer Paul Morris said the council’s rates calculator helped property owners compare the options and understand their potential effects.
How to check your property
The new system will begin on 1 July 2027.
The council says an updated calculator will soon be available through its Let’s Talk consultation platform, allowing ratepayers to see an indication of what the adopted approach means for their property.
For households and businesses planning ahead, that property-specific estimate will be more useful than the district-wide figure. Some owners will carry a smaller share of the rates burden, while others will carry a larger one.
Source: Central Otago District Council media release, 6 October 2026.
