Houses in Wellington

PHOTO: Financial mentors point to the pressure of rising interest rates, mortgages, and cost-of-living increases. FILE

7,825 Wellingtonians Behind on Rates – $39 Million Owed to Council

Wellington is feeling the squeeze. According to the Wellington City Council, 7,825 ratepayers were in arrears at the end of September — that’s 9.3% of households, collectively owing $39 million. In 2021, arrears sat slightly lower at 7,302 ratepayers, or 9.05%.

Meanwhile, Christchurch saw a smaller proportion, with 2.98% of properties in arrears, nearly the same as 3% in 2021.

📈 Rates Rising Faster Than Inflation

Across New Zealand, council rates have been climbing sharply. Stats NZ reported that in the September quarter, rates were up 8.8% year-on-year, slightly below the 12.2% spike seen in September 2024 but above the 7.3% average rise between 2018–2025.

Auckland Council meanwhile reported 6.6% of rates unpaid, or 42,902 households at the start of the 2025/26 year — up from 5.4% over the past two years.

“Reminder letters, follow-up calls, and emails are issued to assist customers,” says Rhonwen Heath, Auckland Council head of rates. “Ratepayers can catch up on outstanding rates at any time during the rating year.”

⚠️ Why Households Are Struggling

Financial mentors point to the pressure of rising interest rates, mortgages, and cost-of-living increases.

David Verry, North Harbour Budgeting Services, explains:

“Before Covid, clients rarely had mortgage stress. Now many households with large home loans find that rates, insurance, electricity, and other costs tip budgets over the edge.”

Some councils have even taken action under the Property Law Act, forcing banks to pay arrears and adding the debt to mortgages.

Research from Massey University highlights the growing strain on retired households. Associate Professor Claire Matthews notes that some arrears may represent protest votes against councils, while others reflect genuine financial hardship.

🏦 Financial Mentors See Increasing Demand

Fincap, which supports financial mentors, reports rising demand for guidance:

  • Local government debts, including rates, parking fines, and dog registrations, are increasing.

  • From 2021–2024, there was a 38.7% rise in clients seeking help with local government debt.

  • Median debt per case has decreased to $1,098, indicating more households are struggling with smaller but widespread arrears.

Mentors also cite inconsistencies between councils and a lack of clear hardship policies as major hurdles.

“We recommend including local government debt in the national debt-to-government framework, and ensuring effective hardship support policies are in place,” says Jake Lilley, Fincap spokesperson.

🔍 Bottom Line

Rising council rates, combined with mortgages, fixed incomes, and everyday cost-of-living pressures, are pushing thousands of Kiwis into arrears. With $39 million owed in Wellington alone, the issue is not just financial — it’s a growing social concern for retirees, families, and first-home buyers alike.

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