Wellington Mayor Justin Lester has announced a $5000 rates discount for first-home builders.
It will take effect from July 1.
The policy is intended to spur the construction of new homes and has also been extended to include apartments.
"In the face of a shortage of supply, we need to be doing more to incentivise construction of new homes for Wellington, especially for young families or people looking to get into their first home."
It'll apply to "anyone building their first home in Wellington, buying a newly built home off the plans, or purchasing an apartment off the plans," Mr Lester says.
It was one of the Mr Lester's key policy promises during the 2016 mayoral election campaign.
The discount will be available to anyone who has not owned their own home before, and will allow them to claim $5000 back off their rates for the first two years of ownership.
Council housing portfolio lead and Deputy Mayor Paul Eagle hopes this will increase the number of new homes being built in the region.
"Historically Wellington has been building 700 to 800 new homes a year.
"We're hoping to get that number up to over 1000 each year. That's why we announced recently that we will be proactively building new affordable houses and why we are making today's announcement."
The discount will be introduced as part of the Mayor's annual plan at the end of the month.