Wellington City Council will vote on Thursday on whether to begin public consultation about changing its rates calculation method from capital value to land value for the 2027-37 Long-Term Plan.

Under a land-value approach, rates would be calculated using only the worth of a property's site, excluding the value of any structures built on it. Common Ground Aotearoa director Pierson Palmer, whose organisation has advocated for the change, said as many as 60% of homeowners would pay less.

Palmer said homes in lower-income areas would likely see decreases while high-income neighbourhoods would probably face further increases. In the city centre, apartments and densely built commercial sites would benefit, while carparks and unoccupied land would be hit with sharply higher rates. "As you get into the city centre abandoned lots or surface level carparks will see big increases and then it's those apartment units and those high density commercial spaces that will see decreases," he said.

The current capital-value method, which combines land worth with the value of buildings, charges Wellington developers roughly $8,000 per year for every million dollars of construction, compared with $6,000 in Christchurch and $4,000 in Auckland. Council staff were directed in the previous triennium to examine options for making residential rating fairer and stimulating housing construction.

Officers have recommended a gradual transition to land-value rating by progressively shifting the portion of rates calculated on land values over time. Implementation would cost between $600,000 and $2 million, according to council estimates.

The council will also consider reducing the rates multiplier for commercial and industrial properties, which currently pay 3.7 times residential rates - well above Auckland's 2.39 and Christchurch's 2.22. That differential has been in effect since 1976, originally justified by large commuter numbers. Thursday's debate will examine options including immediate reductions to 3.4 or 3.25, or phased transitions to 3.0 or 2.8 over four to five years.

Other proposals include widening the area covered by a derelict property differential that charges owners of abandoned sites up to five times standard residential rates. The expanded zone would include the Adelaide Road corridor and areas around the Basin Reserve and Regional Hospital.

Mayor Little said the council had to examine every available option for stimulating development and strengthening the city's economy. "We still have the job of building the city - that we make this a city that we attract people to. We want job growth and job creation," he said.

Planning and Finance Committee chair Diane Calvert expressed doubt the council has the resources to implement the changes given government reform discussions and amalgamation talks. "We have roughly 85,000 rating units and there's quite a bit of work involved," she said. "If you get your billing wrong - that has major consequences."