Sunday , May 27 2018

Auckland tourism tax flawed, says expert

A scheme charging Auckland’s accommodation houses for city-wide advertising has been branded inefficient and ill-conceived – despite efforts to make it fairer.

Tourism Industry Aotearoa says despite attempts to improve the targeted rate, the Auckland Council scheme is flawed and should be overhauled or scrapped.

“The expansion needs to be seriously modified if it is to proceed and it would be preferable for the targeted rate to be dropped altogether,” said the representative body’s chief executive Chris Roberts.

“The basic premise of the rate – that accommodation providers should be stuck with the destination promotion bill for all of Auckland, even though they only get 9% of the visitor spend – remains completely unfair and we will continue to be vocal about that.”

Around 300 Auckland hotels and motel operators are currently paying the accommodation provider targeted rate.

Auckland Council is now planning to apply the rate to properties listed on peer-to-peer (P2P) accommodation websites like Airbnb and Bookabach.

The amended plan says that any property that is listed on P2P accommodation websites as an ‘entire home’ for 28 or more nights a year will be charged the targeted rate.

Homes listed for between 29 and 135 nights a year will also have 25 percent of their capital value treated as commercial for general rate assessment purposes, and those listed for more than 135 nights will treated as fully commercial.

Mr Roberts acknowledged the proposal was an attempt to try and level the playing field, saying: “The council has at least acknowledged that there are thousands of other accommodation providers in the city.

“By including them in the reach of the rate, the proposed changes will lessen some of the inequities of the original scheme.”

But he argued the scheme was still skewed in favour of P2P operators.

“Property owners that rent a ‘room only’ and those that rent out their properties for less than 29 nights a year are completely exempt. Why? Room-only lets make up nearly 50 per cent of the supply on Airbnb. They should have to pay the rate like everyone else who is paid for providing visitor accommodation.

“Also, homes that are rented out for 135 nights a year are not merely ’25 percent commercial’, as the Council indicates they should be considered. 135 nights per annum equates to 37% of the year. A 65% residential / 35% business split is more acceptable.

“Many properties on Airbnb, which lists over 12,000 properties, are operated as commercial businesses and they should be treated as such.”

 

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