The district has 22,000 ratepayers. Some have had rates go down, and some up, more than 20% in their latest instalments.
Queenstown Lakes Mayor Vanessa van Uden said yesterday it was "not the way we intended it to be ... We are going to fix it."
In the meantime, ratepayers are expected to pay the first instalments, which have just gone out, and adjustments will be made in later instalments.
Acting chief executive Stewart Burns said the combination of a new rating system, the rates review and the recent revaluation of properties in the district had caused the problem.
Ms van Uden said the rates review and revaluation happened every three years.
It was "not something we can control", she said.
Most adversely affected were those in the accommodation, high-value residential and country properties, but there were effects throughout the whole district.
"It's quite complicated, but the important thing is that we want to be upfront and say, 'Yes, there is a problem'," Mr Burns said.
"We became aware internally early last week ... it was through the process of responding to calls," he said.
The council had not heard from anyone who had a significant decrease.
The problem had not occurred in the district before, but Mr Burns had heard of it happening elsewhere.
While there were no "exact numbers" on how many ratepayers were affected, "suffice to say there's enough of them to be a concern", he said.
Mr Burns had started work on an "open process" to adjust the rates before the next instalment was due in late November, with an extraordinary full council meeting scheduled for September 7 to discuss the matter.
That meeting will be open to the public.
Under the Rating Act, the council would consult on a revised rating structure which would address the anomalies and "move the rates to a more equitable position overall".
He asked ratepayers to pay the invoice they had received for the first quarter by its September due date and "be patient" with the reassessment.
"We're looking to make adjustments in the next couple of months so their next instalment will reflect the reduced amount. It will even out."
Rates of about $48.8 million, not including water or wastewater, were required, but Mrs van Uden said it was important for ratepayers to understand the council was not seeking to collect additional rates.
The council apologised for "any inconvenience, confusion or concern; it certainly wasn't intended", Mr Burns said.
Denis Costello, co-owner of Wanaka's luxury Tiritiri Lodge, said he was surprised to note the double-digit increase as part of his latest rates instalment.
He was going to contact the council to query the increase, because it was "totally ridiculous".
However, he was pleased to learn that although he was expected to pay the first instalment, future instalments would be recalculated and redress would be made.
