Bach tax stoush continues

Moteliers are calling for a nationwide “bach tax” to apply to property owners who offer houses for short-term rental.

Wednesday, September 30th 2015, 12:00AM

by Susan Edmunds

Earlier this year, the Thames-Coromandel District Council proposed a $200-a-year tax for anyone renting holiday houses, which was then put on hold after a backlash from property owners and booking services.

But Motel Association chief executive Michael Baines said the council should not back down and other local authorities should follow suit on the tax.

“[Bach owners] should be making a contribution,” he said. “If they want to play in this space they need to make a contribution to the local community that is in line with their role, and operate under the same rules commercial accommodation providers do.”

Thames-Coromandel District Council chief executive David Hammond said baches brought economic benefits to the region but there were questions of equity in contribution to rates.

“We would prefer to be the first to explore a voluntary approach and are meeting with the short-term accommodation sector companies to explore whether a voluntary levy method could be practicable.”

He said if that was not successful, the $200 rate would be reintroduced in the 2016/2017 annual plan.

The council’s proposed district plan includes a requirement that bach owners apply for resource consent if they want to rent their houses out to more than six paying customers in one year.

Hammond said submissions were heard in March and the council was awaiting word from the hearings panel.

Daniel Bridges, head of satellites at Trade Me, with responsibility for holidayhouses.co.nz, said any regulatory crackdown on baches would drive providers out of the market.

He said even if the financial costs involved were not large, many owners would not want to risk falling foul of their requirements and would give up offering their houses to rent. “There’s a fear factor that they might break a rule without knowing it.”

He said there was also a risk that such moves were the start of a slippery slope that would end in holiday home owners paying commercial property rates.

But he said there were a lot of myths being perpetuated, including that bach owners did not pay their fair share.

“When you take the total rates paid and divide it by the maximum people accommodated, holiday houses pay an average of $409 per person and motels pay just $226. That’s including the supposedly inflated commercial rates being paid by motels.”

He said most owners were not making much money from renting their homes.

“Most owners of holiday rentals are in it for the Kiwi dream of owning a place to escape and they’re simply renting out to help make ends meet, and they make a gross rental of just $12,000.”

« Mistress of her own property destiny

Free Investment Property Showcase Events: Auckland, Wellington and Christchurch »

Special Offers