Auckland Council cannot find all online accommodation providers subject to new rates

Monday, 2 July 2018

Auckland Council cannot find all online accommodation providers in the region to rate them appropriately.

Auckland Council's new Airbnb tax comes with one 'unfortunate' problem – council staff cannot find all the providers who should be paying increased rates.

For now, they have to trawl booking sites, write letters and rely on word-of-mouth to find those offering accommodation that falls under the council's new policy.

Business rates and the accommodation provider targeted rate (APTR) now extend to the online sector – those booked between 29 and 135 nights year will have to pay 75 per cent residential and 25 per cent business rates, plus 25 per cent of the APTR rate.

Accommodation booked for more than 135 nights will be rated as a business and pay the full APTR rate.

* Airbnb rates approved as Auckland Council passes 10 year 'green' budget

* Auckland council targets Airbnb and Bookabach properties for higher rates

Auckland Mayor Phil Goff says he has agreement from Airbnb that a new tax for online accommodation providers is 'the appropriate thing to do'.

* Auckland City plans to exempt 'room only' Airbnb from targeted rates labelled unfair**

But Auckland Council financial policy manager Andrew Duncan says the council cannot find all of the providers in question unless companies like Airbnb cooperate.

'Unfortunately, it is not possible to identify all online accommodation providers without the co-operation of the websites involved, as they are currently constrained by their terms of service and privacy settings,' he said.

'We don't have access to online accommodation providers' website data as they are constrained by their terms of service and privacy settings.

'The process to identify online accommodation providers and rate them correctly involves searching websites, working with other interested parties – such as hotel operators and body-corporates – and targeted communications with ratepayers.'

If council staff spied a new property suspected of offering accommodation for more than 28 nights, they would send the owner a letter outlining the policy and requesting further information on the property owner's activities.

When Auckland Council first introduced the APTR, it acknowledged online providers got similar benefits from Auckland Tourism, Events and Economic Development's (ATEED) spending as standard accommodation providers.

'While traditional providers pay business rates and the APTR, some online providers are paying residential rates and do not pay the APTR,' Duncan said.

'The decision to extend business rates and the APTR to online accommodation sector from July 1 was to address this disparity and will reduce the amount paid by the traditional accommodation sector.'

Duncan said providers like Airbnb and Bookabach generated an estimated 15 per cent of accommodation sector revenue.

A council paper released in December pegged the forecast revenue for the accommodation sector at $766 million for 2017.

'Analysis of Airbnb listings shows generated revenue of $113m or 15 per cent of total accommodation sector revenue in the last 12 months,' the paper read.

When the APTR was first approved last July, the revenue target was set at $13.45m – 50 percent of ATEED's budgeted spend on visitor attraction and major events.

This year, that increased to allow for inflation, meaning 50 per cent was now about $13.7m.

'Although online accommodation providers are now subject to the APTR, the amount being raised will stay the same, the change means that it's being spread across more providers,' Duncan said.

Before the governing body signed off on Auckland Council's budget last week, Mayor Phil Goff said Airbnb had been in contact about the proposals.

'I had directly from the regional manager of Airbnb his agreement that this was the appropriate thing to do,' he said.

'We have agreement from the hotel and motel industry that bringing Airbnb into line with other accommodation providers creates a level playing field.

'It is purely to do with Airbnb and this is a policy challenge that is being faced . . . on the question of business versus residential rates in almost every council around the country.

'We have to address that question to ensure equity.'