Auckland Council wants to be able to take a slice of any increase in value of properties that have their zoning changing from low density to high density housing, or rural properties that are rezoned urban.
The proposal is contained within an addendum to the council's draft Auckland Unitary Plan, which aims to boost intensification of the country’s biggest city.
"At the moment in New Zealand, any increase in land value resulting from the rezoning decision remains with the landowner," the council's draft plan says.
But under its "shared land value uplift" proposal, the council would take some of the capital gains, either through a fee from developers, taking a portion of a developer’s profit or a city-wide levy.
Opponents have slammed it as a tax grab by stealth.
The plan is yet to be notified but includes some dramatic changes to areas such as Takapuna, Milford, Onehunga, Royal Oak and New Lynn, as the council tries to find ways to house the city’s growing population.
Under the plan, 44 per cent of the city will stay mostly unchanged but 56 per cent is earmarked for intensification.
In centres such as Albany, Botany, Henderson and Sylvia Park, properties will be allowed up to 18 storeys. In Avondale, Flat Bush, Glen Innes, Milford, Northcote and Manurewa – among others – owners will be able to build up to eight storeys.
Any building more than four storeys high will have to sit back from the street.
Already, 13 property owners have applied to Auckland Council demolish their houses and build multi-storey properties.
Some of the biggest gains will be for the owners of homes who find their properties are newly sub-divisable. That is expected to boost values by at least $100,000 in each case.