Visitor numbers to Auckland is growing. To meet the demand, online accommodation services are expanding rapidly. In the last year Airbnb rentals is estimated to have taken at least 10% of the market share of short term accommodation.
As a result, ATEED which stands for Auckland Tourism Events and Economic Development is introducing a levy typically aimed at hotels, motels and serviced apartments to fund infrastructure to support more tourism. As a result Businesses in the hotel and motel industry pay higher rates than residential ratepayers. The new “tax”or rate is called Accommodation Provider Targeted Rate.
But Auckland Council now wants to charge higher property rates to residential owners who let out their houses on Bookabach or Airbnb. How much higher would your rates be if you rent out your house using airbnb? Currently the Auckland Council have not released any details on how it will be calculated but a spokesperson said that the property rates will be based on the number of nights booked for short term accommodation via Airbnb and Bookabach. These suburbs are affected:
The proposed rates only apply if you are using online platforms to let out:
- an apartment
- an entire dwelling
- a self-contained unit.
They do not apply if only part of the dwelling is let, such as a bedroom.
So this move by the Auckland Council will have one of two possible effects: Higher property rates is the same as a higher taxes. Short term prices will increase because property owners need to make more money to cover higher tax costs. On the other hand, some owners may find it no longer worthwhile listing on short term online websites and switch back to long term rentals. In this case, there will be a shortage of short term accommodation in Auckland especially during the peak season and during key events.