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Auckland Council’s Changes to Commercial Rates

Statement on Auckland Council’s Changes to Commercial Rates

NZ’s leading holiday rental platform, Bookabach, today said that while Auckland City Council has made a commendable effort to consult with the community and business on their plans to introduce commercial rates and the Accommodation Provider Target Rate (APTR) to short term rental operators, they are going in the wrong direction on solving the tourism infrastructure funding problem. There is still an uneven playing field for short term accommodation providers as the new proposed changes do not apply to hosted accommodation, hostels and B&Bs.

Many organisations within the tourism industry, including Bookabach, believe that the property rating model is a fundamentally flawed vehicle for implementing what is perceived to be a “bed tax”, and the result is a clunky solution that will be hard to administer and encourage under-reporting.

The Auckland City Council should work with the central government to have a more consistent approach to what tourism tax should be applied across the country, instead of there being a piecemeal, and very inconsistent approach that is different from council to council area.

Bookabach is concerned that the changes introduced, which mix residential and commercial rates - and the APTR - will not only hit mum and dad bach owners in the hip pocket - the cost also cannot be passed onto the traveller as a transparent cost and the tiered approach may potentially encourage under reporting of night a home is let out for tourism purposes.

Bookabach General Manager, Peter Miles, said that the distinction between hosted and not hosted accommodation is another example of how unsuited rates are in collecting a tourism related revenue stream. Hosted accommodation, hostels and B&Bs are not included in this. So, someone renting out one or more rooms in their home, provided they are there, would not incur commercial rates.

“This new commercial rate regime is based on a flawed methodology that will only capture segments of the short-term rental accommodation market,” Mr Miles said.

“This proposed approach may cause homeowners to leave the short-term rental accommodation market and increase the cost of renting a bach. This is a bad result for tourism, local businesses and the locals renting out their own holiday home.

“Short-term rental accommodation in whole homes is an important part of the tourism accommodation supply in Auckland and this policy will simply serve as a brake on the tourism sector in the region, Mr Miles concluded.

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Note: A summary of Bookabach’s submission to Auckland Council can be found at the following link.

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