Local Government Act 1974

Roads (other than regional roads), service lanes, and access ways - Formation, alteration, stopping, and closing of roads

326: Betterment arising from creation or widening of a road

You could also call this:

"Paying the council if a new or wider road increases your land's value"

Illustration for Local Government Act 1974

When a council makes a new road or widens an existing one, it might take some of your land. If the rest of your land becomes more valuable because of the new or wider road, you might have to pay the council some money. This money is called betterment.

If the council widens a road and takes land from one side, the owners of land on the other side might also have to pay betterment. You will have to pay the council if the value of your land increases more than the compensation you got for the land that was taken.

You can pay the betterment in one payment or in instalments over 20 years or less. You will have to give the council notice and sign a memorandum of charge, which is a document that says you owe the council money.

The memorandum of charge will be registered and will be a first charge on your land. This means the council will get paid first if you sell your land.

The council will use the betterment money to pay for the cost of making the new or wider road. If there is any money left over, it will be used to pay for other road work in the district.

Note that in this case, a road does not include an access way, and you can find more information about this in the Public Works Act 1981.

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This page was last updated on 10 September 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM420421.

Topics:

Government and voting > Local councilsHousing and property > Land use

325: Road widths, or

"How wide roads should be"

327: Building-line restrictions, or

"Rules about building near roads are no longer a law"

Part 21Roads (other than regional roads), service lanes, and access ways
Formation, alteration, stopping, and closing of roads

326Betterment arising from creation or widening of a road

Notwithstanding anything in section 62(1)(f) of the Public Works Act 1981 or in any other Act, where—
the council—
1. forms a new road in the district; or
2. widens any existing road or part thereof in the district; and
for that purpose the council takes or purchases or otherwise acquires any part of any land and the other part of that land will have access or frontage to that road; and
by reason of the formation or widening of the road the value of the remaining part of the land of the owner whose land was taken or purchased or acquired is increased by an amount that exceeds the amount of compensation payable to him, in accordance with the Public Works Act 1981, in respect of his land so taken or purchased or acquired,—

Where an existing road is widened and land from only one side of the road is taken or purchased or otherwise acquired for that purpose, every owner of land with a frontage to the other side of the road shall, if so required by the council, pay to the council on account of betterment such sum of money as represents the increased value thereby given, or likely to be given, to his land. Where only part or parts of a road are widened, only those owners of land with frontages directly opposite the part or parts being widened may be required to pay betterment pursuant to this subsection.
Any claim for payment of betterment under subsection (1) or subsection (2) shall be made within 1 year from the execution of the work out of which it arose, and shall be made in form 1 in Schedule 12. The amount to be paid to the council shall be ascertained in the manner provided by the Public Works Act 1981, or in a manner as near thereto as in the opinion of the Land Valuation Tribunal the circumstances of each claim will admit.
Any or all claims arising out of the widening of any road or part thereof may, with the consent in writing of all parties, be heard and determined together, and the Land Valuation Tribunal shall have power, on the application of any party, to order that all or any claims under this section in respect of land in which several persons have interest shall be heard and determined together and to apportion the amount awarded on account of betterment and the costs of proceedings against the several persons, in such proportions and in such manner as it thinks fit.
Any person liable may, if he so desires, pay the amount awarded to be payable by him, with interest at a rate per annum as fixed by the council, by equal half-yearly instalments extending over a period of 20 years or less, in which case he shall—
within 14 days after the date of the award, give notice in writing to the principal administrative officer of the council of the period over which he intends to extend payment; and
within 1 month after the date of the award, execute and deliver to the principal administrative officer a memorandum of charge, in form 2 in Schedule 12, upon the estate or interest forming the subject of the charge against him, and pay the costs of the preparation and completion of that memorandum;—

Repealed
The memorandum of charge shall, when registered, bind the property therein described, and operate as a first charge upon the estate or interest therein of the respondent, and rank in priority to all estates, encumbrances, and interests created by him or any of his predecessors in title.
Any such charge may be registered without fee in the Land Registry Office or in the Deeds Register Office of the land registration district wherein the land affected thereby is situate.
Notwithstanding anything to the contrary in any such charge, the council shall accept payment of the whole of the unpaid instalments secured by any such memorandum of charge at any time when the same is tendered, and for the purpose of any such tender interest shall be calculated and paid up to and including the day of tender.
A receipt expressed to be in full for all money secured by any such memorandum, signed by the principal administrative officer and endorsed on the memorandum, shall vacate the charge.
Money received by the council under this section as betterment shall be credited against the cost of the formation or widening of the road or part thereof which includes the acquisition of the land required for the work and the formation, sealing, kerbing, and channelling. Where the money received is more than sufficient to meet the cost of the work, the amount of the excess shall be applied in respect of the widening or formation of any other road within the district.
In this section the term road does not include an access way.

Notes

Section 326: inserted, on 1 April 1979, by section 2 of the Local Government Amendment Act 1978 (1978 No 43).
Section 326(1): amended, on 1 February 1982, pursuant to section 248(1) of the Public Works Act 1981 (1981 No 35).
Section 326(1)(b): amended, on 19 January 1981, by section 38 of the Local Government Amendment Act 1980 (1980 No 82).
Section 326(1)(c): amended, on 30 March 1985, by section 39(1) of the Local Government Amendment Act 1985 (1985 No 60).
Section 326(1)(c): amended, on 1 February 1982, pursuant to section 248(1) of the Public Works Act 1981 (1981 No 35).
Section 326(3): amended, on 1 February 1982, pursuant to section 248(1) of the Public Works Act 1981 (1981 No 35).
Section 326(5)(a): amended, on 19 January 1981, pursuant to section 2(2) of the Local Government Amendment Act 1980 (1980 No 82).
Section 326(5)(b): amended, on 19 January 1981, pursuant to section 2(2) of the Local Government Amendment Act 1980 (1980 No 82).
Section 326(6): repealed, on 1 July 1998, by section 10(1) of the Local Government Amendment Act (No 3) 1996 (1996 No 83).
Section 326(10): amended, on 19 January 1981, pursuant to section 2(2) of the Local Government Amendment Act 1980 (1980 No 82).
Section 326(11): amended, on 30 March 1985, by section 39(1) of the Local Government Amendment Act 1985 (1985 No 60).