Whakatane District Council has abandoned a plan to charge higher rates for land owners with more than one house on a site.
The council said last year that it would impose the higher rates because ratepayers need to pay for services used in every house, whether they have one house or two.
But the Ngati Whare iwi opposed the idea, saying it would not work in a village like Minginui, which is under a single ratepayer title.
Mayor Tony Bonne now says the council needs to revise the whole rating system because it's unfair to places like Minginui, where the people are mostly unemployed.
He says it will look at the rating system when it begins working on a 10 year strategy next year.