The Government has given Christchurch City Council power to adjust rates more often, following the approval of an order-in-council on Thursday.
From July the council will be able to change rates during the financial year rather than only at the start.
Minister of Local Government David Carter says the Canterbury earthquakes have significantly impacted the nature and speed of building activity, so rates should be immediately adjustable to reflect the rateable value of properties.
The Government says the move will provide council with about $8 million in extra income.
Mr Carter says he was approached by the council to investigate a way of bringing in additional rates revenue in an attempt to rebalance the income it has lost due to rates remissions for uninhabitable properties.
The order will apply if a house is demolished, a new building is completed, or land is subdivided.
Mr Carter says the effect on ratepayers will vary, but the move enables rates to be collected more fairly as the rebuild gathers pace.
He says the order will not affect those covered by the council's 40% rates remission on uninhabitable residential properties.
The council has welcomed the new legislation.
Christchurch mayor Bob Parker says it makes sense that rates actually reflect the status of thousands of properties that will be demolished and rebuilt in the coming years.
He says if the status of a property changes during the year, the owner will receive a property valuation notice and a revised rates assessment from the council.