Tauranga City Council has signalled an average rate increase for householders of about 2.8 per cent this year if no big changes are made to budgets in the draft 2016-17 annual plan.

Chief financial officer Paul Davidson told councillors today that the increase was higher for residential ratepayers than commercial ones because of the impact from this year's city-wide revaluation of properties. Commercial rates were predicted to go up by an average of nearly 1 per cent.

The actual proposed rates increases were 4.8 per cent for residential and 2.9 per cent for commercial, but the net amount dropped to 2.8 per cent and 0.9 per cent once the growth in the number of new rateable properties over the last 12 months was deducted.

Mr Davidson linked the bigger increase for householders to the city's revaluation which saw overall values increase more for residential properties than commercial properties.

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There was a 1 per cent rise in the residential component of the total capital value of the city. It meant that residential properties now comprised 81 per cent of the total capital value of Tauranga, compared with 19 per cent for commercial properties.

Total rates levied on householders were proposed to rise by nearly $4.72 million to $103.35 million while commercial rates went up nearly $570,000 to $20.42 million.

Mayor Stuart Crosby said the 1 per cent shift from commercial to residential needed to be shown in suburb-by-suburb figures. He referred to documents he had seen before Christmas showing a breakdown of the shift.

The uniform annual charge component of council water charges was proposed to increase by 4.5 per cent.

The city's net debt was proposed to be $394 million - $16 million less than anticipated by the council's long-term plan. The ratio of debt to revenue would drop to 209 per cent.