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New “Bed Tax” on Airbnb and Bookabach properties: What you need to know.

Photo: DSC_2902 by maticulous

New Zealand councils are starting to crack down on the fast-growing short-term rental market.

Auckland Mayor Phil Goff has recently announced that people renting their places out on websites like Airbnb and Bookabach will have to pay the “bed tax” or accommodation tax not dissimilar to the one paid by hotels and motels.

Queenstown was the first city to change how they deal with Airbnb. The proposed change was initiated as there was an obvious shortage of rental places for workers to live in, with 14% of houses across Queenstown and Wanaka listed online for short stays. Investors of short-stay properties will now need to seek council consent to let their properties out for more than 28 days, as well as pay additional “bed tax” to be paid on all the bookings.

For Auckland council the issue with short-term rentals is based mostly on fairness. The proposed rates will vary depending on how many nights per year a place is being let out for, and whether it’s a room in the owner’s existing dwelling or a whole house / apartment that can be rented. If it’s only available for 4 weeks per year, then no additional rates will apply. If it’s 180 days per year, then the full business rate applies. There will also be some gradation if you fall somewhere in between.

Tauranga and Christchurch City Councils are also considering ways of dealing with their Airbnb rentals.

There are plenty of arguments out there saying that system will be hard to implement and to administer and will affect small time mum and dad investors the most. A lot of people believe it’s also unfair as some accommodation providers like hostels and B&Bs are excluded from these rules.

A lot may change in the short-stay rental sector in the next 12 months and it will be fascinating to watch the changes in NZ housing market that will follow.

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