The changes are expected to affect 420 ratepayers in the Rotorua district.
Councillors also agreed to reduce the Uniform Annual General Charge (UAGC) by $40 to $500 - rather than $410 as originally proposed.
That means average rates increases for Rotorua residential urban properties will now be 8 per cent, rather than 6 per cent. Rural residential property increases will remain at 8 per cent.
Dozens of farmers attended council hearings earlier this month to express their outrage over proposed 19 per cent average rates increases for farmers.
On hearing of yesterday's changes, Federated Farmers spokesman Neil Heather said it was "better than what it was, by the sound of things", but remained unhappy.
"It's still unacceptable that farmers are stuck for these big increases," he said.
Mr Heather said the decision to keep the UAGC higher than previously suggested was "a big plus", and commended the council for taking note of farmers' concerns.
But as he began to "get his head around" the latest proposals, he was keen to stress the financial implications of high rates increases on farmers.
"It's probably one of the biggest expenses on the farm," he said.
Mayor Steve Chadwick said discussions over the Long-term Plan had been "a very tough process" that had dealt with a number of sensitive issues.
"The farmers should be satisfied that we have listened to them," she said.
Mrs Chadwick accepted neither urban or rural communities would be pleased with the council's proposed rates increases - an average of 7 per cent across the board - but remained adamant about the council's need to balance its budget.
Deputy mayor Dave Donaldson also believed the council had responded to farmers' concerns.
"I think it's a very significant shift [from the previous rating framework] ... I would hope that they would think we have listened."
