Queenstown Lakes District Council is proposing an average rates rise of 2.74% council chief executive Debra Lawson said yesterday.
A rates cut of 0.88% had been mooted before the council chose the rates-funded option to reduce debt by $1.9 million.
Ms Lawson announced the "low" increase as part of the council's draft annual plan and said the proposed overall spike was being driven by "affordability, debt reduction and value for money for ratepayers".
"There have been some tough choices to make. However, there is a lot of good news in the draft," she said.
QLDC deputy chief executive and financial manager Stewart Burns said the debt reduction/rates rise option was thought to be "a responsible approach to the work council is undertaking to ensure that the 2012 10-year-plan will be affordable.
Mr Burns said rates varied according to location and land use categories, meaning a residential 0.88% decrease in Arthurs Point could be countered by a 3.3% increase in Glenorchy.
The commercial range was 2.23% in Arrowtown to 3.92% in Queenstown, while the accommodation range was 2.41% in Wanaka to 5.27% in Queenstown.
District-wide rural property rates increases ranged between 4.15% and 8.06%.
"These increases are mainly due to the increases in capital value rates - roading and general rates - to fund the debt-reduction proposals," Mr Burns said.
That meant "significant reductions" were made elsewhere in 2011, with the uniform annual general charge marginally decreasing by $0.12 per property from $68.12 to $68 and the waste management charge dropping by $21.84 per residential property from $172.84 to $151.
The waste management charge has also reduced by $14.02 per non-residential property from $123.02 to $109.
The Wakatipu-only Aquatic Centre charge lessened by $1.54 per property to $92 per annum, with the recreation charge decreasing by $12.60 per property to $268 per annum and the governance charge dropping slightly, by $0.10 per property, to $128.
Ms Lawson said the exception was an increase for certain targeted rates "for water supply and wastewater, due to increases in depreciation and the estimated prices from the utilities maintenance contract".
"This is a draft plan and there are some key issues that need community feedback before we can take the final decisions," she said.
"Council is looking for a firm guide on these issues - and others - including a proposal to lower the waste management rate with residents paying more according to the amount of rubbish they make," Ms Lawson said.
QLDC will be asked to adopt the draft plan on Tuesday with submissions opening on April 16 and closing on May 16.
