New Zealand 2026 election: what national parties could change about your council rates

As a retired homeowner relying mainly on NZ Super, an important distinction is that your local council sets your rates, but Parliament can change the laws and funding arrangements that determine how councils raise and spend money.

This means a national government could influence your rates bill without directly setting the amount you pay.

There are three separate questions worth considering when you assess party policies:

1. Could a government limit how much councils are allowed to increase rates?
2. Could it change which services councils must pay for, or how those services are funded?
3. Could it reduce the financial pressure on councils sufficiently to slow rates increases?

These are different approaches, and they can have quite different consequences for homeowners.

1. What the National Party is proposing

The National Party's 2026 policy, Keeping rates affordable, proposes a national system of rates capping.

Proposed initial range: 2–4% annually

Under the proposal:

• Councils would generally have to keep annual increases in their rates price within a 2% minimum and 4% maximum.
• An independent regulator would monitor compliance and assess applications for exemptions.
• Councils could seek exemptions in exceptional circumstances, including natural disasters.
• Councils could also seek flexibility where they demonstrate prudent financial management and a justified need.
• The initial system is intended to take full effect from 1 July 2029. Keeping rates affordableProposed rates capping system - Our work - Ministry for Cities, Environment, Regions and TransportHave your say on the Local Government (Rates Capping) Amendment Bill

An important point: this is not necessarily a 4% maximum increase in your personal rates bill.

The cap applies to a council's average rates price per rating unit. Individual homeowners can still experience different increases because of property values, rating categories and council rating policies. Proposed rates cap: Technical questions and answers for Local Authorities - Our work - Ministry for Cities, Environment, Regions and TransportLocal Government (Rates Capping) Amendment Bill

For example, if your council's average rates price increased by 4%, your individual bill might increase by more or less than 4%.

There is also a 2% minimum. This means the proposal is not simply a promise that rates will never rise by more than inflation or that councils will reduce rates.

2. What has already changed, and what remains proposed?

It is important to distinguish between legislation already passed and legislation still being considered.

Policy	Position as at 30 October 2026
Local Government (System Improvements) Amendment Act	Passed and received Royal Assent in September 2026
Rates Capping Amendment Bill	Introduced and passed its first reading; still before the select committee
Full rates cap implementation	Proposed for 1 July 2029

Local Government (System Improvements) Amendment Act 2026Local Government (Rates Capping) Amendment BillHave your say on the Local Government (Rates Capping) Amendment Bill

The first Act changes the purpose and priorities of local government. Councils must give particular attention to core services, including:

• Network infrastructure, such as roads and water services.
• Public transport.
• Solid waste collection and disposal.
• Parks, reserves and other community facilities.
• Regulatory services.

It also seeks stronger accountability and transparency around council performance and financial management. Local government system improvements - Our work - Ministry for Cities, Environment, Regions and TransportLocal Government (System Improvements) Amendment Act 2026

The rates cap is a separate proposal. Its final form could change during the parliamentary process.

3. What would councils still decide?

Even with a national rates cap, councils would retain considerable control over local decisions.

Decision	Who decides?
National rules governing rates	Central government and Parliament
Target range for rates increases	Central government through legislation and regulations
Local council budgets	Elected councils
Whether to maintain or improve local roads	Councils
Parks, libraries, pools and rubbish services	Councils
Local infrastructure priorities	Councils
How rates are distributed between property categories	Councils, within national law
Individual property rates assessments	Councils, under national rating rules
Local service levels and spending priorities	Councils, within their legal responsibilities

Proposed rates capping system - Our work - Ministry for Cities, Environment, Regions and TransportProposed rates cap: Technical questions and answers for Local Authorities - Our work - Ministry for Cities, Environment, Regions and TransportGuide for central government engagement

In other words, a national government could restrict the rate of rates increases, but it would not take over the day-to-day running of your local council.

What happens if a council cannot afford everything?

This is an important issue to consider.

If a council faces increasing costs but cannot raise rates sufficiently, it may have to consider:

• Delaying some infrastructure projects.
• Reducing or postponing improvements to facilities.
• Finding savings in administration and service delivery.
• Borrowing or using other funding sources.
• Seeking an exemption from the rates cap.

A rates cap therefore does not automatically eliminate the underlying cost of maintaining roads, pipes, parks and other infrastructure. It changes how councils can raise revenue to meet those costs.

4. What about water rates, power and insurance?

For your household budget, this distinction is particularly important.

Water and wastewater charges

Excluded from proposed rates cap

Drinking water, wastewater and stormwater charges are excluded from the proposed 2–4% cap. They are dealt with under separate water-services legislation. Your total council-related bill could therefore rise by more than the headline rates cap.

Local Government (Rates Capping) Amendment BillGovernment to cap rates

Electricity bills

These are not controlled by a council rates cap. National has a separate energy policy intended to address electricity affordability, but power prices are also influenced by generation costs, network charges and electricity retailers.

2026 Election Policy

Home and contents insurance

A rates cap does not limit insurance premiums. Insurers set premiums according to their assessment of risk, rebuilding costs and other factors.

Healthcare

Healthcare funding and access are principally central-government responsibilities, not council rates decisions. A council rates cap will not itself reduce GP fees, prescription costs or other healthcare expenses.

5. What does this mean if you mainly live on NZ Super?

For a homeowner on a relatively fixed retirement income, there are some important practical considerations.

A rates cap could make the non-water portion of your council bill more predictable from 2029 onwards. However:

• It does not guarantee that your total council bill will rise by no more than 4%.
• It does not protect you from increases in insurance, electricity or healthcare costs.
• It does not guarantee that local services will remain at their current level.
• It does not automatically provide additional financial assistance to pensioners.

One other measure worth investigating is the Government's Rates Rebate Scheme. Eligible low-income homeowners may receive assistance with their council rates. Receiving NZ Super does not automatically qualify you, because eligibility also depends on income and other circumstances.

You can ask your council about the scheme and whether you qualify.

6. Questions to ask all parties before voting

Rather than looking only at promises to control rates, I would look at the following questions when comparing the 2026 election policies.

Question	Why it matters to you
Will you cap rates increases?	Predictability of household costs
Will water charges be included?	Your actual council-related bill
Will you provide rates relief for pensioners?	Affordability on NZ Super
How will councils fund ageing infrastructure?	Avoiding deferred maintenance and future costs
Will councils have to reduce services?	Maintaining local amenities
How will you address electricity affordability?	Household power bills
What will you do about healthcare affordability?	Regular access to medical care

You can check the parties' published policies through Policy.nz's 2026 election comparison.

For further detail on the actual legislation, see the Parliament's Rates Capping Bill.

My overall assessment of the issues to examine

There are two different things to weigh up:

Predictability versus affordability. A cap might make rates increases more predictable, but it does not necessarily make the underlying cost of homeownership cheaper.

Lower rates versus local services. Restricting council revenue may encourage more efficient spending, but it can also mean delayed infrastructure improvements or changes to local services if other funding cannot be found.

For someone relying mainly on NZ Super, I would pay particular attention to the combined cost of rates, water charges, insurance, electricity and healthcare, rather than judging a party solely on its rates policy.

The most useful question is not simply whether a party promises to cap rates. It is whether its policies would leave you with more financial security as a homeowner over the next three to five years.

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Worked for 10s