Two New Zealand councils have joined a wave of authorities nationally cracking down on short-term holiday lets.
Tauranga City Council has asked its officers to investigate a targeted rate on rooms booked through sites such as Airbnb and Bookabach following Auckland’s introduction of a short-let ‘bed tax’.
The proposal follows similar rates imposed by councils in Auckland, Queenstown and Rotorua – the latter having seen a 67 per cent rise in guest nights at Airbnb-type rentals this summer.
And it coincides with a Westland District Council drive to identify residents making significant money from Airbnb, or using their homes as businesses, who are failing to pay commercial rates.
Tauranga’s commercial hospitality sector has welcomed the proposed tax despite opposition from Bookabach general manager Peter Miles, who warns the kind of “new commercial rate regime” imposed on Auckland will “simply serve as a brake on the tourism sector”.
Hospitality New Zealand’s Alan Sciascia says it will help counter the practice of “boutique accommodation businesses running under the guise of a private residence”.
“I am very pleased the council is considering making this move. It’s only appropriate that all businesses should be treated alike,” he said.
In the 12 months to February, Airbnb hosts in Tauranga earned more than $12 million.
“This is no longer play money generated during peak season holidays, this is serious business,” said Mr Sciascia.
The Westland District Council meanwhile, has announced a crackdown on those using short-let holiday rentals as a significant income generator without paying the appropriate rates.
The district’s Airbnb hosts are required to pay commercial rates though a policy introduced in 2015 if they are operating as a business entity.
Mayor Bruce Smith said there were 92 properties in Hokitika alone advertised on Airbnb.
“The policy clearly states if the person is renting their house or room for residential purposes to a tenant they don’t have to pay commercial rates,” he said.
“But if they rent it on a platform like Airbnb or Bookabach and earn more than $15,000 then they are rated as commercial.
“It was identified in 2015 that people were earning a lot of money from Airbnb properties, but weren’t paying commercial rates on that.
“It doesn’t cover the mum-and-pop type people who rent it out only for a month.”
Commercial rates, which Smith labelled “very fair”, are almost double residential and include a $900 payment towards tourism promotion.
The council has sent 1200 letters to people whose rates and residential addresses differ.