Auckland’s new short-let bed tax is “fundamentally flawed”, “clunky” and “hard to administer” claims a NZ holiday bookings giant.
Bookabach, part of the global HomeAway group, says Auckland City Council is “going in the wrong direction” over a decision to extend an accommodation bed tax to include short-stay lets like Airbnbs.
General manager Peter Miles says the changes will not only hit “mum-and-dad bach owners in the hip pocket” but may encourage under reporting of the nights a home is let out for tourism purposes.
“Many organisations within the tourism industry, including Bookabach, believe that the property rating model is a fundamentally flawed vehicle…and the result is a clunky solution that will be hard to administer and encourage under-reporting,” Mr Miles said.
“This new commercial rate regime is based on a flawed methodology that will only capture segments of the short-term rental accommodation market.”
However, Auckland Council’s decision to extend an existing accommodation bed tax to cover short-let rentals has been welcomed by many hotel and motel operators hopeful of a nationwide roll-out of the policy.
Airbnb has also welcomed the move.
Auckland will see the staggered commercial rates introduced as early as next financial year, in a first the Accommodation Advisory Council believes will be copied across Aotearoa.
“A lot of other councils right through New Zealand are talking about similar things at the moment and realise that they want everyone on the same playing field,” said chairperson Nigel Humphries.
Auckland mayor Mayor Phil Goff said: “For say 29 to 135 days…they’d be paying say a quarter of the business rate and three quarters of the residential rate – over 180 days a year it’s obviously a business, and it would be treated like a business.”
Hospitality New Zealand welcomed the extension, claiming it was what accommodation providers across Auckland had been pushing for.
But chairperson Troy Clarry argued the tax should go even further – to also apply to single rooms and properties rented through platforms like Airbnb or Bookabach for less than 29 days.
“Half of the accommodation providers on Airbnb have single rooms available – and that’s still competition for us, so it’s not just a whole house,” he said.
A new Deloitte report shows Airbnb is worth about $660 million a year to the New Zealand economy and supports more than 6,000 full-time equivalent jobs.
The report found that in 2017, 578,000 stays were booked with Airbnb in NZ for 1.4 million guests in 225 locations around the country. Airbnb guests spent more than $780 million here in 2017 – 2.8 percent of all tourism expenditure across New Zealand.