The Auckland Council is revising 5000 rates bills after an outcry by homeowners who were denied the benefit of a 10 per cent transition cap and left with rises of up to 60 per cent to pay this year.
Mayor Len Brown and councillors were caught off guard by the size of rates rises for those who had made home improvements and the number who were hit after the Herald revealed them on Wednesday.
Yesterday, Mr Brown said he had fought for the rates cap to soften the blow of bringing in a single rating system based on capital (improved) value by limiting residential rate increases to 10 per cent a year for each year for three years.
"I've tried to be fair throughout the transition.
"That's why I've asked council officers to go back and do work to assess the impact of this across Auckland.
"Then we can see what can be done."
The embarrassing patch-up job goes back to transition management provisions in the Super City's founding legislation. It applied the cap to only "unchanged properties" at the time of the revaluation on July 1 last year.
This was neither highlighted at the time nor was its explained in the brochure accompanying this week's rates demands.
"This was news to all councillors," said councillor Cameron Brewer. "It certainly was not discussed in our long budget meetings and debates but, perhaps, it should have been presented.
"I don't think the staff realised just how many ratepayers would be caught by it."
The legislation matches council policy that all ratepayers should not subsidise those who had chosen to make alterations to their properties.
A property becomes a changed one, for example, when there is a new subdivision, a building consent given to add a bedroom or a garage, or shift to commercial use.
The council at first said it was assessing 13,000 changed properties, the owners of which were getting increases over the 10 per cent cap.
This was 2 per cent of the region's 515,000 rateable properties.
However, by late yesterday the council had excluded properties that were newly subdivided lots, had only a deck added and others where rates had actually decreased.
It estimated the changed category was less than 1 per cent of all properties.
Last night, the council said trying to change the cap law to give relief was unlikely because it would take too long.
"There are other mechanisms available such as rates remissions and grants that can achieve the same ends," said a spokesman.
The council had processed about 8500 residential building consents in the past two years which was down in line with the economic climate.
"The issue is not knowing how many works will be completed, the revaluation capturing some changes, and the very slow rate of growth in the region, which has translated into far fewer subdivisions and far less building works occurring."