Holiday home rental owners likely to get higher rates bills
One owner of short-stay accommodation in Christchurch has been fined $300 for operating without a consent.
The news comes as the Christchurch City Council will this week decide whether to charge higher rates to owners of unhosted Airbnb-style accommodation – a move one provider says will have negative effects for the city’s tourism sector.
If approved, higher rates will become the second major initiative put in place by the council to regulate the short-term accommodation industry after it has come under increasing pressure in recent years from moteliers upset that they faced greater regulation.
The first initiative, introduced almost a year ago, was to bring in new rules requiring owners to apply for a resource consent to rent their properties to visitors for more than 60 days a year.
It is estimated about 990 homes in Christchurch are rented to visitors for more than 60 days a year, yet the council confirmed late last week that just 63 consent applications have so far been received and 38 granted.
The $300 infringement notice was issued following a complaint from a member of the public. Council regulatory compliance head Tracey Weston confirmed the council was acting only on complaints at the moment, rather than proactively finding rule-breaking hosts. One staff member would be hired to work in this area, but Weston could not say when that position would be filled. A job description was being written.
The proposed change to the rating system would see any residential property used for unhosted short-stay accommodation – where the owner does not live on site – for more than 60 nights a year, charged a “business differential” rate.
For the average house value of $750,000, the rates would increase by about $2273 per year. That is too high and not equitable, according to Christchurch Holiday Homes business director Sue Harrison.
The cost to apply for a resource consent was already enough of a financial burden and adding another $2200 would discourage people from entering the industry altogether, Harrison said. It would also discourage people from applying for a consent in the first place, she said.
The council is using the consenting process to identify short-term accommodation providers.
The council said the average consent cost is $2170, with costs ranging from $629 to $7970.
Harrison said she understood the need to make the industry equitable with hotels and motels, but at least they had multiple units on site to recoup their costs. Short-term accommodation providers usually had only one dwelling per property. She believed the council should be rating providers only on the business differential for the number of nights they were consented for, rather than the entire year.
The increased rates would limit accommodation choice in the city, and see more people stay in Selwyn and Waimakariri, which did not have the same restrictions, Harrison said. She was also concerned the council did not consult properly with the industry on the proposed rating change.
Council corporate reporting manager Bruce Moher said properties used for travellers accommodation have always been liable for the business differential, but they had been difficult to identify.
He said the Local Government (Rating) Act did not allow the council to only apply a rate or differential for part of the year.
Moher said the council followed its normal consultation process in compliance with the Local Government Act. The visitor accommodation proposal was on page 42 of the council’s long-term plan consultation document and consultation generated 363 comments, including from Airbnb and Hospitality NZ.
Earlier this year, Hospitality NZ Canterbury branch president Peter Morrison said the organisation had been advocating for business rates to apply to short-term accommodation for a long time.
He said the move would help level the playing field for hotels and motels, which already pay business rates, as well as other fees including costs associated with obtaining a regular building warrant of fitness.
The council will meet today and Thursday to make final decisions on what to include in the 10-year budget, the long-term plan (LTP).