South Wairarapa property owners face 84 percent growth in district council rates over the next nine years to pay for major upgrading of water supply and wastewater infrastructure along with the continuation of current services. Greater Wellington Regional Council costs are additional.
Water projects are the core of the South Wairarapa District Council (SWDC) Long Term Plan (LTP) – although there is significant uncertainty around key numbers other than those for the LTP’s first year (starting this 1 July) because of the New Zealand-wide transition into new “Local Waters Done Well” structures. These are due to start during 2026-27
Critical decisions are yet to be made but South Wairarapa is expected to transition its wastewater, water supply and storm water assets – “three waters” – into a new Wairarapa-Tararua multi-council entity. On current projections, this likely will reduce some of the cost increases ratepayers and water users face in future years.
Meantime, SWDC’s nine-year plan gives property owners a first indication of the likely impact on rates as their district – like many others – grapples with huge infrastructure upgrading needs – whatever local governments entities are in place.
First comes 2025-26 certainty
In 2025-26, SWDC is certain to implement an average rates increase of or near 4.3% – a big slowdown from the previous year’s 14.7% and from the past five year’s near doubling of district council rates.
In drawing up its LTP, SWDC has heeded ratepayer demands for moderation in the next year which it achieves partly through deferral of some expenditure on three waters into future years. Any council cost savings through operating efficiencies will not become clear until the LTP and its associated 2025-26 budget are finally approved in June, after the current public consultation.
The 4.3% increase is a headline figure. Underneath, SWDC plans to re-apportion the total rates burden such that remote rural property owners will see reductions from the previous year while many in-town residential ratepayers pay 8-12% more (see below).
The LTP consultation paper – released on 7 March and open to written and verbal submissions this month – sets out nine years of forecasts for: total SWDC rates income; expenditure allocations across the council’s core areas of operation: and for higher borrowing to fund major infrastructure upgrade projects.
The nine-year rates growth of 84% is a compounding of SWDC’s forecast average increase each year through the period. The annual peak under this scenario will be 10.9% in 2028-29.
Three waters costs
As expected, the major rates growth driver will be spending on waste waters, water supply and storm water management – a combination of higher operating and debt funding costs. To illustrate this, SWDC says its expected rates take in 2025-26 is $30.4 million, with 38% of this total going into three waters spending: In five years’ time, that percentage will be 47%, with the rates take up to $42.2 million.
In tandem, council borrowing is forecast to rocket up from $40 million this coming 30 June balance date, to $175 million in June 2030, then to $290 million by June 2034. The big borrowing with be for waste water upgrading – plant renewals and expansions for Featherston, Greytown and Martinborough – followed by water supply and storm water upgrade projects. There is also a planned steady annual increase in roading improvements.
SWDC’s forecasts include rising interests costs due to the debt build-up. In 2025-26, the interest bill will be $2.1 million – this is expected to hit $14.2 million by 2033-34 (final year of the LTP) at which point debt servicing will be a whopping 18% of council operating costs.
SWDC says total operating spending on the three waters over the nine years will reach $160 million, while the capital expenditure requirement will be either $220 million or $276 million – a huge step-up in equivalent levels of operating and capital spending during the most recent past years.
Uniform charges change
Many in-town households will face significant rates increases in 2025-26 notwithstanding the SWDC’s overall moderate ratres rise of an average 4.3%.
The LTP consultation paper shows that a typical Martinborough property with a $860,000 capital value (CV) will pay $5,549 in district council rates, or 8% more compared with 2024-25. In Featherston, a house valued at $530,000 will see district council rates rise 12% to $4,996.
By comparison, a farm with a $4 million CV and located more than 10km from a town centre will see a 16% cut
to $6,551. These figures include GST but not the as- yet-unknown regional council component of the total rates bill.
These examples reflect a key change in SWDC’s LTP – the raising from 21% to 28% of that portion of total annual rates income which is sourced through uniform charges on all ratepayers (rather than value-based rating).
SWDC says it has agreed with some ratepayers that the previous 21% level led to unfairness for owners of higher value properties once the council moved (in 2024-25) to rating on an improved value base, rather than land values. The uniform charges change is a “rebalancing” among ratepayers.
The coming year will see continuation and refinement of the “separately used or inhabitable parts” (SUIP) rating policy which was rolled out last year. Multiple SUIP rating is here for the long-term and those ratepayers affected will see significant increases as another outcome of the shift to 28% in SWDC’s application of uniform charges.
