Annual rate hikes above 20 percent could be a reality for some Auckland ratepayers.

A slim majority of councillors have voted against capping the increases, and distributing the rates burden across the board.

One proposal came down to a single vote.

Councillor John Watson says some homeowners will suffer heavily, so others pay just their fair share.

He says those other ratepayers will be paying their true rates, rather than subsidising the rates of those whose valuations have risen more sharply.

Councillor Watson says every option on the table would be hard on some ratepayers.

The skyrocketing rates in some parts of Auckland may be a problem central Government has to solve.

Councillor Watson says many homeowners will suffer, until an alternative revenue source is found.

He says they would like to see the Government and the council come up with something that's fairer on people across the board.

A reduction in the rates burden for businesses and lifestyle blocks is pushing up residential rates.