Auckland households face a 7.9% rate rise next year, primarily to fund operating costs for the $5.5 billion City Rail Link when it opens for passengers.
The increase will cover the $235 million annual cost of operating the new underground rail service, and is the largest rate rise since Auckland Council was formed in 2010.
For the average household, already strained by the cost‑of‑living crisis, annual rates will climb from $4023 to $4341, a weekly cost of $83.
Auckland Mayor Wayne Brown’s rates announcement came shortly after Prime Minister Christopher Luxon confirmed at his post‑Cabinet press conference this afternoon, alongside Local Government Minister Simon Watts, that the Government will introduce a rates cap of 2% to 4% from January 2027. The cap excludes water charges and non-rate revenue such as fees and other charges.
“Ratepayers are fed up,” said Luxon, saying some communities had faced regular double-digit increases and the Government expected councils to demonstrate fiscal prudence.
Auckland’s proposed 7.9% rate increase is contained in Brown’s mayoral proposal for next year’s budget and is in line with the rate increases in the council’s long-term plan. After next year, rates are set to rise by 3.5% each year.
Brown said his proposal was focused on progressing and finishing what the council started last term – transport reform, governance improvement and value for money.
“This proposal sets direction for the year ahead – consolidating what we have achieved and focusing our resources on what matters most. It keeps faith with Aucklanders, maintains our contract with the community, and ensures we are ready for the next long-term plan [in 2027],” he said.
Brown acknowledged the 7.9% average household rates rise was higher than he would have liked, but said it reflected the costs of the City Rail Link, a project he has criticised for blowouts and delays, but now sees as vital to reinvigorating Auckland and driving economic growth.
The $235m bill to run the CRL includes maintenance costs, interest on debt to fund construction, depreciation, facilities such as new stations, track access charges from KiwiRail, and running more services.
As well as the proposed rate rise in the budget, there is a $50m budget gap that officers are developing options to address, and an extra $15m for the 21 local boards under a fairer funding review.
There is a savings target of $106m and asset sales of $34m, with Brown expressing disappointment at progress made in this area.
Brown said he expected the Local Government (Auckland Council) (Transport Governance) Amendment Bill to return control of Auckland Transport to the council would become law in March next year.
This would be followed by a six-month implementation period when Auckland Transport will become responsible for public transport, and the council will be responsible for transport planning matters and the road controlling authority.
“The decisions we make in the coming months will impact the daily lives of Aucklanders, who expect things to be better. If we get this right, we will deliver progressive and long-lasting improvements to transport in Auckland.
“Ultimately, I want to eliminate the dumb stuff that infuriates me and ratepayers,” said the mayor.
Brown reacted to the Government’s rates cap plan by questioning how Auckland would pay for things like the CLR.
“Putting a cap on rates isn’t going to solve anything. It will just defer it for a couple of years then ratepayers will be paying even more,” he told the Herald.
“Councils are faced with making decisions that involve significant investment and should not be restricted by government telling us what we can and can’t do.”
Last week, Transport Minister Chris Bishop, Auckland Minister Simeon Brown and the Auckland Mayor said the CRL would open to passengers in the second half of next year.
Two sources have told the Herald the opening date is set for September.
Auckland Transport director of public transport, Stacey van der Putten, said there was no set opening date but she was confident the new rail line would open in the second half of the year.
“We should be able to provide a tighter opening-date range in the coming months, but the opening date will ultimately be announced when a satisfactory level of testing, commissioning, and readiness has been demonstrated,” she said.
A Herald investigation in October found the council’s annual rates revenue has nearly doubled from $1.57b to $3b since it was formed in 2010.
Over that period, the typical household’s yearly rates rose by 85.4%, from $2025 to $3800 in the 2024-25 financial year. The average annual rate increase was 4.52%.
While the hefty rise in rates may surprise many, it coincided with 34% inflation, a 22% population increase, and major boosts in the council’s other revenue streams and infrastructure investment.
Council financial strategy manager Michael Burns said rate increases had averaged 2.16% a year above inflation, helping fund key priorities such as public transport, water quality, storm recovery and resilience, environmental initiatives and the response to Covid-19.
To keep rates as low as possible, he said, the council had reduced its reliance on rates revenue, from 49% of total income at the start of the Super City to about 35% today.
Councillors will consider the mayoral proposal on December 15 and it is to go out for public consultation in late February.
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