Auckland Mayor Wayne Brown reveals rate hike, warns without them homeowners would be in for 'shock' in 2024

Auckland homeowners are facing more costs after the mayor revealed rates are set to rise by 4.66 percent. 

The increase would see the average Auckland household, with a home valued at $1.4 million, paying an extra $154 per year or $3 a week. 

Mayor Wayne Brown announced the increase on Monday revealing hes proposing a general rates increase of 7 percent which will be offset by reducing some targeted rates. The general rate increase is well above the 3.5 percent which was previously signalled. 

But Brown said the overall increase of 4.66 percent is well below annual inflation which is sitting at 7.2 percent and expected to remain above 7 percent until mid-next year. 

He said it is the first time an Auckland Mayor has proposed a rates rise below inflation.

"My proposal would reduce rates in real terms and assist in the national fight against inflation, supporting Auckland households through the agony of this cost-of-living crisis and helping to protect the essential services that Aucklanders value," Brown said. 

The rates rise is in response to Auckland Council's $295 million budget shortfall and will be recommended to the Governing Body this week.

Brown said the huge shortfall threatened a rates rise of more than 13 percent which is "completely unacceptable" and will not happen under his leadership.

The total rates a household pays are a combination of general rates and various targeted rates depending on where the property is in Auckland. 

Brown said the 4.66 percent proposal consists of a general rates rise of 7 percent mitigated by reducing some targeted rates by two-thirds in 2023 and 2024.

The mayor's 2023/24 budget proposal is seeking record savings of $130 million across Auckland Council and council-controlled organisations, including Auckland Transport, Tataki Auckland Unlimited, and Eke Panuku Development Auckland. Included in this are operational savings of $60 million that will focus on management and unfunded strategies, rather than service cuts.

Local boards will be asked to play their part in plugging the $295 million budget hole by finding 5 percent in cost savings from their total annual funding of $298 million.

The proposed sale of Auckland Council's 18 percent minority shareholding in Auckland International Airport Ltd could raise around $2 billion, thereby reducing the debt servicing cost to ratepayers by at least $88 million a year.

"We want to make systemic changes to ensure there isn't a rates rise shock in 2024. If tough decisions and trade-offs are not made now, Auckland households may still face a hefty rates rise next year," Brown said.

The 2023/24 budget proposal will go before a governing body meeting on December 15 and consultation next year.

The increase comes as Kiwis grapple with high inflation pushing the costs of goods and services up. Huge hikes to the Official Cash Rate (OCR) have also added thousands of dollars to the average Kiwi's mortgage payments.