31 August 2017

Media: Rotorua Daily Post

Topic: Short term rental rates charges

Inquiry

We are doing a story today about this notice thta has gone out to some residents:

Click HERE to read the facebook post

Can you tell me:

-How many of these letters have gone out?

-How many residential addresses are having their rates changed from residential to business rates?

-How did you discover these places needed to have rates changed (that they were acting as short-term accommodation)? For examples, was a sweep done of the Airbnb website?

-Are these mainly Airbnb-type accommodation?

- Can you give me a run down of the rules on residential v business. For example, i see the notice mentions that the property is being used as accommodation by paying guests in excess of 100 days? Can someone stay on residential rates if guests are paying and staying less than 100 dates?

-I see on the notice it is assuming the property has three toilets. Is having three toilets a requirement for businesses (to have three toilets)

-It also states business inspectors may be sent out - has this happened in any cases?

-And lastly, can you tell me the monetry difference (for example, the percentage) between residential and business rates)?

Response

From Chief Financial Officer Thomas Coll:

We don't know the exact number of short-term rentals in Rotorua. There are more than 700 advertised on two major websites which advertise these (Book-a-Bach and Air BnB) but there will be duplication between sites and there will be others advertised elsewhere.

Rotorua Lakes Council's current rating policy allows for up to 100 days use as a holiday home before tipping to a business rate but Council relies on property owners to disclose the level of use or in some cases members of the public bring it to Council's attention.

In such cases, if they disagree, the property owners need to provide evidence that they have not exceeded the 100 day threshold that would see them move to a business rate.

There has been no sweep of websites or mass sending of letters. As and when Council becomes aware of a short-term rental that may be exceeding the 100 day threshold, the owners are contacted and that discussion is followed up with a letter.

Business inspectors are sent out if there is a dispute about any details such as the number of toilets (there are different rating amounts depending on the number of toilets at a property)

It's not possible to estimate the potential lost rates revenue without knowing the exact number of short-term rentals and then knowing or being able to check whether they exceed the 100 day threshold. It's a difficult thing to regulate.

Because rates are dependent on capital value of a property we can't provide the exact difference between residential and business rates but a rough rule of thumb is that business rates would be about double residential rates because of targeted business rates such as the economic development rate.

Extra info

The community was asked for feedback on the issue of short-term rentals and the regulation of these as part of annual plan consultation earlier this year. There were 58 submissions received on this topic and Council resolved to:

• Retain the existing policy of 100 days rental and look to move to more proactive monitoring and enforcement.
• Continue to review its provisions in the District Plan and undertake a plan change should one be required.
• Work with the hospitality industry, Destination Rotorua and the community to ensure that any future proposed District Plan change does not cause additional unnecessary cost and/or barriers to our community or the tourism sector.