Planned rates increases of up to 700 per cent may force Waikato charity groups to cut back the work they do for the needy.

Hamilton City Council has decided that the charities' not-for-profit retail shops are competing with other businesses and should be rated on the same basis as them.

"Council must be seen to treat all ratepayers on a fair and consistent basis under the rating policies and the differential rating system that is in place," wrote the council's revenue manager, John Gibson.

Rates for St Vincent de Paul will increase almost 700 per cent, from $964 to $6728, under Hamilton City Council's draft 10-Year Plan.


Shop manager Mike Rolton said the St Vincent de Paul Society would have to drop some services, which included daily free lunches for needy families in 19 schools, community lunches for 70 homeless people and nightly meals for the needy.

"It would reduce the community service because we work to a very tight budget," Mr Rolton said.

"We do 560 lunches a day. Last year we did 16,000 school lunches and fed 16,500 people meals from a van."

Two second-hand shops in Frankton earn the society just under $300,000 each year which is spent on the community services.

Mr Rolton said he would make a submission against the proposed change, which ends rate remission for property used for retail purposes.

Hospice Waikato CEO Elizabeth Bang said she was worried. She said the group, which provides care for the dying, rented buildings where it had retail outlets and applied each year for rates relief.

An end to that could mean the closure of its depot.

"It will affect us significantly," Ms Bang said. "Money is tight at the moment and it's really hard to get grants. We would have to reconsider the space that we've got and look at a cheaper option slightly out of town."


The shops provided Hospice Waikato with 20 per cent of its annual $1.9 million budget.

The deadline for submissions is April 19.