Betterment for Local Road Improvements Policy

This page relates to the 2024-27 National Land Transport Programme.

Introduction 

This is the NZ Transport Agency Waka Kotahi (NZTA) policy on betterment for local road improvements

Date of issue: Updated September 2023 | NZTA may review and amend investment policies at any time, including in response to any changes in the Government Policy Statement on land transport.

Purpose

To set out the circumstances under which territorial authorities (city councils and regional councils) may be able to collect betterment from landowners and the apportionment of any proceeds from betterment between NZTA and the council.

Definition of terms

Betterment is a form of value capture and refers to the increase in value of land following the construction or improvement of an adjoining road. Under the terms of the Local Government Act 1974, section 326 the owner of the land may be required to make a betterment payment to the council.

Local Government Act 1974, section 326(external link)

Policy statement

 Where betterment applies

Section 326 of the Local Government Act 1974 requires a council, under certain circumstances, to collect betterment from landowners receiving value from improvement works.

Local Government Act 1974(external link)

Betterment applies where:

• a council acquires property to construct or widen all or part of a road
• the owners of the remaining property that adjoins the improved road gain an increase in property value that exceeds the compensation due to be paid to them for the property by the council.

The council shall then be paid the amount that exceeds the compensation.

Betterment also applies where:

• a council acquires property on one side of an existing road to widen it
• the owners of the property on the other side of the road gain an increase in their property value and may be required to pay betterment to the council.

Sharing of betterment

Any betterment collected by a council shall be apportioned between NZTA and the council at the rate of funding assistance applying to the work in question and will be applied as supplementary funding against the cost of the road improvement work. For example, if the investment has a funding assistance rate (FAR) of 51% from NZTA and 49% from the council, NZTA would receive 51% of the betterment payment.

The multi-party funding policy provides more information about supplementary funds and how they must be shared.

Multi-Party Funding Policy

Exclusions

Legal and valuation costs incurred in establishing the financial value of betterment are not eligible for funding assistance.