Helping your business stay up to date on local regulations is one of our top priorities. Refer to this page often to keep up with the latest laws and regulations that apply to holiday rental owners and property managers operating in New Zealand.
Helping your business stay up to date on local regulations is one of our top priorities. Refer to this page often to keep up with the latest laws and regulations that apply to holiday rental owners and property managers operating in New Zealand.
The NZ Nationals have reversed their decision to scrap the previous Government’s “app tax”, which involves a change that would see GST imposed on accommodation and transportation providers, like Bookabach and Uber. Currently, this is only levied for those making over $60,000 in annual revenue.
The Nationals campaigned heavily against this change earlier this year, but it will now be put in place next April as planned.
A subsequent petition against this measure has since been taken down.
The Taupō District Council is seeking Government support to help impose rules on those offering short-term accommodation (STRA) in the district due to increasing complaints from locals.
The council will meet to discuss how it can effectively police approximately 1400 STRA properties in the district, including those listed on Bookabach, Airbnb and Bachcare.
An agenda report from council staff outlined additional impacts of STRA on the community, such as negative impacts on long-term housing and discrepancies of ratings between STRA and commercial operators.
Bookabach cautions the District on imposing regulations like night caps, unless they are reminiscent of Queenstown, which is an example of this being executed well through its consistency across the accommodation sector.
With the negotiations ongoing it remains unclear if the National Party commitment to repeal the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 ahead of its scheduled commencement on 1 April 2024.
South Waipara District Council has proposed the introduction of a “targeted charge” for short-term rental operators in the region.
Reaction to this has been contentious, with the council receiving written considerable feedback.
Supporters of the charge included commercial accommodation providers, who said this would help “level the playing field” and “free rental stock”.
Meanwhile, those opposing refute that small-scale short-term rental operators already pay “hefty rates” and provide a “much needed service” to support events in an area with “limited accommodation”.
Deliberations on issues raised will be held in November.
The newly elected NZ Nationals Government’s housing policies include the restoration of no-clause evictions for rentals, allowing under 30s to use KiwiSaver savings for rent bonds and ending the automatic roll-over of fixed-term tenancies.
The NZ Nationals unveiled a tax plan which included a 15% tax on foreign buyers of homes worth over $2m.
Off the back of the announcement, the New Zealand Property Investors Federation said that rental property owners are “facing financial difficulties and need a tax break”, however, Renters United have refuted that those “relying” on interest deductibility to survive “should not be in business in the first place”.
NZ’s property market is its largest industry – adding NZ$41.2b annually to its GDP.
South Wairarapa District Council debated a proposed additional rates contribution for short-term accommodation providers, such as Airbnb and Bookabach.
The proposed DST would be payable by multinational businesses that make over €750 million a year from global digital services and over NZD$3.5 million a year from digital services provided to New Zealand users. It is expected to generate $222 million over the four-year forecast period.
The tax would be applied at three percent on gross taxable New Zealand digital services revenue, a similar rate to those adopted by other jurisdictions such as France and the United Kingdom.
Bookabach parent - Expedia Group - supports efforts to bring uniformity to global corporate tax through the OECD and encourages governments not to look to stand-alone arrangements.
New Zealand Nationals have unveiled a tax plan in anticipation of the country’s October election, which included a 15% tax on foreign buyers of homes worth over $2 million.
New Zealand Property Investors Federation said that rental property owners are “facing financial difficulties and need a tax break”, which was refuted by Renter United.
Additionally, The New Zealand Initiative has prepared its Prescription for Prosperity document for the incoming Government, which outlined limited supply as a fundamental cause to the country’s housing affordability crisis.
Bookabach supports the assertion that short-term rentals have not significantly impacted housing affordability.
Bookabach and its partners are engaging with policy-makers, to protest proposed GST taxation changes, by communicating the detrimental impact of placing an unnecessary burden on STRA platform users at a time where the cost of living and inflation are still skyrocketing. Further, Bookabach is highlighting the importance of the STRA sector for the New Zealand economy overall, in fuelling job growth, tourism, infrastructure and supporting local businesses.
A proposal put forward but the Labour Government, as part of newly- proposed taxation reforms, would require digital platforms that offer accommodation, food delivery and ride-sharing to charge GST on all bookings. The National Party predicts consumers could pay up to 15 percent more for Uber and STRA like Bookabach if the government's planned tax changes are introduced.
If the proposal to charge GST on all platform accommodation bookings is implemented, modelling based on the Oxford Economics Report predicts up to a $5 billion decrease to New Zealand's GDP, which we argue would have otherwise been generated by tourists staying in STRA listings.
Bookabach and its partners are engaging with policy-makers to argue against these changes and communicate the likely detrimental impact of placing an unnecessary burden on STRA platform users, at a time where the cost of living and inflation are still skyrocketing. Further, Bookabach maintains the importance of the STRA sector for the New Zealand economy in fuelling job growth, tourism, infrastructure and supporting local businesses.
Revenue Minister David Parker says the government still plans to levy GST on bookings with ride-sharing services and online accommodation services. The proposed changes will take place from April 2024, and are expected to raise $47 million a year, according to Inland Revenue figures.
Vrbo and its partners are pushing back on Labour’s unsubstantiated tax grab, given the current inflated cost of living and negative effects this tax could have on New Zealand’s tourism sector still in recovery.
A proposed bill before the NZ parliament may require online travel agencies to start collecting GST on bookings from April 2024. The proposed changes involve implementing rules designed by the Organisation for Economic Co-operation and Development (OECD), created in response to the rapid growth of the digital economy. These include the implementation of an information reporting and exchange framework, to facilitate greater digital transparency. While proposed GST changes to KiwiSaver and other managed fund providers have now been scrapped due to significant public backlash, the GST on accommodation platforms remains on the table. Inland Revenue estimates that the GST changes are likely to deliver an extra $47 million a year for the Federal Government. We expect there to be a full Select Committee process.
Vrbo and its Partners are pushing back on Labour’s tax grab through these higher prices, given current pressures around the cost of living and the effect these changes will have on NZ’s already-fragile tourism sector.
Under a new Federal Tax Bill, the NZ Government is considering extending the country’s existing GST rules for “electronic marketplaces” to include the supply of online accommodation services, as well as ride-share and food delivery platforms.
Proposed amendments to the GST Act 1985 would apply to all forms of accommodation, including short-stay and visitor accommodation services. The Minister of Revenue, David Parker, has further clarified that taxable accommodation services in this respect would include “all forms of accommodation” (such as commercial, short-stay, and visitor accommodation) other than exempt residential accommodation as well as “closely connected services” such as cleaning services. In effect, platform providers like Bookabach and Vrbo will need to charge GST on any bookings made through their platforms.
If successfully passed, these reforms will be some of the most extensive attempts to tax digital share economy platforms globally, with advocates suggesting that the new levy will generate an additional NZ$47 million in taxation revenue every year from both STRA providers and ride-sharing platforms like Uber.
We are working on an urgent response to Government regarding these proposed amendments and will keep all of our Partners posted on further developments in this conversation.
To ease the pressures of increasing tourism on regional communities, many smaller councils are considering the introduction of a regional visitor levy. There are ongoing discussions being had between federal government and its ministries, local government and tourism providers as to what a regional visitor levy could look like on a national level. The controversial idea has been a common theme in new destination management plans across New Zealand. For instance, the draft destination management plan for the Queenstown Lakes District was released in mid-July for public comment and included a visitor levy as a possible tool to cover tourism costs.
As we await the release of these final tourism management plans at a local level, Vrbo continues to advocate for national regulation containing a simple registration scheme for all short-term rental listings, a code of conduct that is backed by a strikes-based disciplinary regime, and an industry body to adjudicate compliance with the code of conduct.
Following a lengthy process to change the District Plan, Christchurch City Council has determined that property owners listed on STRA platforms in residential areas will now have to obtain a resource consent at a likely cost of $1000 or more. Under the new regulations, a consent is required for properties rented out for less than 60 nights a year for a maximum of six. The council is unable to decline these kinds of applications but they are able to impose conditions. If a property is being rented out for more than 60 nights a year and hosts up to 12 guests, it will be classed as a “discretionary activity” and a consent will also be required—although the council will be able to decline a request in this scenario. The rules also apply to STRA properties being rented out for less than 60 nights and which host between six and 12 guests at a time. We are currently liaising with stakeholders involved in these issues and have not yet ruled out an appeal on the rules.
Nelson City Council has agreed to proactively enforce existing bed and breakfast regulations for STRA providers, set out under Nelson’s Resource Management Plan. Under the plan, bed and breakfast providers who do not reside at the property must acquire resource consent and now the same rules will be applied to all short-term accommodation providers. Further information about the Nelson City Council Resource Management Plan can be found here.
The Court of Appeal has found that Auckland Council did not have the power to target visitors directly via a rate charged to motels, hotels, serviced apartments, and other short term rental accommodation providers. Introduced in 2017 and locally dubbed the “bed tax” or visitor levies, these rates were then used to finance the council’s tourism operations.
The Court of Appeal judgment found that there was “virtually no assessment” from the council and that its “failure to adequately consider this mandatory relevant consideration was an error of law.” Auckland Council is currently reviewing the appellate judgment.
Long-running plans to update the rules for short-term rental accommodation in Queenstown have passed another hurdle as the Environment Court recently approved them for use.
The new rules require holiday homeowners to inform the Council that a property will be let out for the purposes of short-term rental accommodation. There are also changes to activity tests for the purposes of obtaining a resource consent.
All impacted partners should read the Queenstown District Local Plan amendments.
On Monday, 12 April 2021, Bookabach urged the four West Coast councils and two iwi groups to tread carefully on proposed bach regulations contained in the Te Tai o Poutini Plan.
The recently released draft of the Te Tai o Poutini Plan covers the West Coast councils of Westland, Grey and Buller. The draft plan contains measures that will curtail short-term rental accommodation across the West Coast. Measures under consideration include restrictions on bookings with five or more guests, as well as the imposition of a 180-day night cap for holiday rental accommodation.
Bookabach has called on these groups to work with us on Central-Government-led regulation that contains a simple registration scheme for all holiday rental listings and a code of conduct that is backed by a strikes-based disciplinary regime.
More information about the proposed changes can be found here.
On 26 February 2021, local media reported that Auckland Mayor, Phil Goff, had changed his mind on the application of the accommodation provider targeted rate (APTR) on tourist accommodation.
The reported change of heart by Mayor Goff on the application of the APTR comes as the contentious policy is set to face another Judicial Review. Mayor Goff is reported to have said that he is now in favour of a bed tax for tourist accommodation.
Bookabach welcomed this change of heart and called on both Mayor Goff and Central Government to work with the tourism industry to develop a lasting solution to questions about tourism infrastructure funding.
We will continue to watch developments on the APTR closely, and inform local partners of relevant updates on the contentious policy.
As we mentioned in the last update, Buller District Council (BDC) announced that it is considering changes to the property rating system in the area. As part of this review, BDC is considering the creation of a new rating category for short-term rental accommodation.
BDC will be holding hearings on the changes in the near future. Once these dates are available, we will inform impacted partners.
Bookabach does not support the application of council rates on short-term rental accommodation. We believe this approach is misguided, as it often suffers from high levels of non-compliance and results in excessive and retrospective rate increases for mum-and-dad bach owners.
On 15 January 2021, Buller District Council (BDC) announced it is considering changes to the property rating system in the area. As part of this review, BDC is considering the creation of a new rating category for short-term rental accommodation.
Bookabach does not support the application of council rates on short-term rental accommodation. We believe this approach is misguided, as it often suffers from high levels of non-compliance and results in excessive and retrospective rate increases for mum-and-dad bach owners.
Impacted partners are encouraged to make a submission by 19 February 2021 at the following link.
On 17 December 2020, Nelson City Council announced a review into the way short-term rental accommodation is regulated in the region.
Bookabach has urged the Council to be wary about progressing localised changes to the regulation of short-term rental accommodation. In any event, we look forward to participating in a constructive conversation with the Council about opportunities to partner together on building sensible and lasting regulation for our growing sector.
As a rule, Bookabach advocates for national regulation that contains a simple registration scheme for all holiday rental listings, a code of conduct that is backed by a strikes-based disciplinary regime and an industry body to adjudicate compliance with the code of conduct.
More information can be found at the following link. We will endeavour to keep impacted partners informed about opportunities to provide feedback.
Christchurch City Council releases consultation summary about its proposed short-term rental regulations
On 26 November 2020, Christchurch City Council announced a new consultation round on its proposed changes to short-term rental accommodation regulations and released the submissions it had received from interested stakeholders.
While we believe the proposed amendments to the rules for short-term rental accommodation are an improvement on the existing approach, Bookabach believes that further refinements should be made before they become policy.
These reservations include: the unfair playing field between hosted and unhosted accommodation, the uncertainties and costs in the resource consents process, as well as outstanding definitional issues about the activity mechanism to determine the type of consent required for each short-term rental property. Pleasingly, a number of other stakeholders have raised similar concerns in their submissions to council.
Full details and information about how to make a follow-up submission can be found here.
New Tourism Minister, Hon Stuart Nash MP, recently made some comments about his views on the regulation of our sector.
Speaking at a meeting of local government and tourism leaders at Rotorua Lakes Council, Minister Nash said that regulation that tells people how to use their property is ‘big brother territory.’
Bookabach is supportive of this sentiment. We advocate for national regulation that contains a simple register all short-term rental listings, a compulsory code of conduct that is backed by a strikes-based disciplinary regime, as well as consistent planning rules and compliance standards for the entire industry.
Bookabach took the opportunity to again push back on Christchurch City Council’s proposed regulation for short-term rental accommodation in that city.
While we believe the proposed amendments to the rules for short-term rental accommodation are an improvement on the existing approach, Bookabach believes that further refinements should be made before they become policy.
These reservations include: the unfair playing field between hosted and unhosted accommodation, the uncertainties and costs in the resource consents process, as well as outstanding definitional issues about the activity mechanism to determine the type of consent required for each short-term rental property.
Bookabach continues to push back against these proposals and urges the Council to work with us in advocating for a central government approach to regulation.
Following the recent re-election of the Ardern Government, Stuart Nash has been appointed as the new Tourism Minister.
Bookabach has written to Minister Nash to congratulate him on his appointment and to encourage him to continue efforts to build a national regulatory framework for our growing sector.
We will endeavour to keep you updated with relevant developments.
On 15 July 2020, the New Zealand Government confirmed in media reports that the Ministry of Business, Innovation and Employment (MBIE) had established an inter-agency group of officials to look at short-term rental issues. The group comprises officials from a number of government agencies including StatsNZ, Inland Revenue and the Department of International Affairs, among others.
Bookabach has held preliminary conversations and shared our insights regarding key elements that nation-wide regulation should cover, including the introduction of a register and Code of Conduct, to ensure it is effective.
We’ll advise as further opportunities to engage with the Government arise.
Christchurch City Council’s Urban Development and Transport Committee considered a number of changes to short-term rental rules over meetings on 9 and 10 September 2020. Specifically, the Council staff proposed the below changes that were ultimately passed by Councillors:
Bookabach called on the Council to continue listening to the sector to address the potential downside from unintended complexities in the proposed rules for our growing sector.
While the proposed amendments to the rules for short-term rental accommodation are an improvement on the existing approach, Bookabach believes that further refinements should be made before they become policy.
These reservations include: the unfair playing field between hosted and unhosted accommodation, the uncertainties and costs in the resource consents process, as well as outstanding definitional issues about the activity mechanism to determine the type of consent required for each short-term rental property.
Bookabach continues to push back against these proposals and urges the Council to work with us in advocating for a central government approach to regulation.
In August 2020, New Plymouth District Council released a summary of the community submissions that it received in response to its proposal to implement an arbitrary 90-day night cap and occupancy limits for short-term rental accommodation.
The documents released by the Council show widespread community opposition to Council’s plans to impose arbitrary regulation on short-term rental accommodation in the region.
Bookabach has called on the Council to listen to the overwhelming community feedback and shelve plans to impose a cap on our growing sector.