Auckland Mayor Phil Goff's bed-tax baby crying out for re-think

Friday, 27 September 2019

Auckland Council spends $1.2m defending hotel rates

ANALYSIS: Is it time to put Auckland Mayor Phil Goff's bed-tax baby to sleep?

He first raised the policy during his successful 2016 mayoral campaign as a way of raising millions so Auckland Tourism, Events and Economic Development could go about its business in the City of Sails.

The argument is that central Auckland's accommodation sector benefits from ATEED's work, therefore it should pay.

Eventually, Goff's baby was adopted by Auckland's governing body, with the revenue target set at $13.45 million – 50 per cent of ATEED's budget.

* Auckland Council spends $1.2 million defending new hotel rates

* Auckland's Airbnb rate, pot of gold or problem?

* Thousands of rateable Airbnb properties not on Auckland Council books as industry slams new policy

Mayor Phil Goff advocated for the creation of a bed tax, but its extension to the online sector has been problematic.

* About 1100 to pay Auckland Council's Airbnb rate after 26,000 letters sent out

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

* Auckland council targets Airbnb and Bookabach properties for higher rates**

Over a year has passed since Auckland Council extended its bed tax, officially the accommodation provider targeted rate, to the online sector.

Stuff first revealed issues with the extension last July, reporting just 1118 online providers were loaded into the council's database to pay the APTR.

Auckland Council staffers simply have to trawl the internet to find properties that could be liable to pay the APTR.

That figure represented just 29 per cent of the 3800 properties Auckland Council estimated could be liable.

Fair enough, this journalist thought, the policy is new and there were bound to issues early on.

Fast forward over a year and Goff's bed tax is still experiencing growing pains.

In fact, they have barely subsided.

As of this week, just 46 additional ratepayers were forking out, bringing the total to 1164.

Auckland Council extended its first bed tax to the online sector to create a level playing field.

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

Auckland Council figures suggest thousands of online accomodation providers are flouting the region's bed tax.

'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.'

But Auckland Council's attempt at extending the region's bed tax has fallen well short of the mark.

Striving for fairness is commendable, but what use is a rating policy if it cannot be properly applied?

Ironically, it could be argued the extended bed tax, though well intentioned, has created further inequity.

It would seem some Airbnb and Bookabach users are paying the APTR, while others continue to thumb their noses at it.

Auckland Council was warned about possible issues.

Bookabach this week contacted Stuff claiming the council refused to heed its warnings about non-compliance.

Currently, Auckland Council staffers are relying on web searches to identify and correctly rate properties liable for the APTR.

Bookabach believed it was time to take the policy out of Auckland Council's hands.

The company is backing a compulsory Government register of rental accommodation.

The register would assist in developing better policy on 'tourism infrastructure financing, urban planning and municipal services'.

One thing is for sure – Goff's bed tax baby is crying out for a re-think.

HOW IT WORKS

A 2018 Auckland Council report estimated there were at least 12,370 Airbnb listings in the region.

Properties booked between 29 and 135 nights a year paid 75 per cent residential and 25 per cent business rates, plus 25 per cent of the APTR.

Accommodation booked between 135 and 180 nights was liable for 50 per cent of the APTR, as well as a split business-residential rate. Dwellings reserved for more than 180 nights paid the full APTR and were classed as businesses.

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.