Councils throughout the country are being advised to double check their rates were legally set after Christchurch's were found to have been faulty for almost 10 years.
Since 2004, the Christchurch City Council's rates resolution has not included the right wording around due dates and penalty payments, making it potentially open to legal challenge.
Internal Affairs said the mistake was discovered by an analyst looking the council's regulations and notified it on 22 July.
Local Government New Zealand president Lawrence Yule said on Wednesday if the error is minor, it can be corrected fairly simply by using the Rates Resetting Act.
Mr Yule said it's possible that other councils have made similar mistakes and he would like all to now check their resolutions.
Local Government and Internal Affairs Minister Chris Tremain also wants the resolutions re-checked.
However, Mr Tremain said even if there are more problems, under the Rating Act, people still need to pay their rates unless the High Court declares them to be illegal.
Mayor not sure how big problem is
Christchurch mayor Bob Parker said he doesn't know how big the problem is and could not confirm if it only concerns penalties for late payments or is more widespread.
Mr Parker told Radio New Zealand's Morning Report programme on Wednesday the problem was missed not only by the council, but also by the Department of Internal Affairs and Audit New Zealand.
Council officers will discuss the problem with the agencies in Wellington on Friday.
The council's acting chief executive, Jane Parfitt, said this year's rates will be voted on again at the end of August and information is being sought on how to correct previous resolutions.
Ms Parfitt said legal advice is being taken on whether ratepayers would have grounds to challenge the rates they have been charged for the past nine years.
Audit New Zealand said its focus is on establishing the facts and won't comment further.