Business rates in store for Wellington’s Airbnb-style homes

Tuesday, 18 February 2025

Homeowners affected include any offering short-term accommodation from online sites such as Airbnb and Bookabach.

Owners of Airbnb-style homes could be paying higher rates on their properties as the Wellington City Council looks to update its rating policy.

One councillor believes the change could be a small solution to tackle Wellington’s housing shortage but Airbnb says the move represents an unfair burden on hosts that will directly harm the visitor economy.

Homeowners affected include any offering short-term accommodation from online sites such as Airbnb and Bookabach for periods of less than one month, as well as any house or unit that is or has been available to rent for more than 60 days of the financial year.

Wellington homes offering short-term accomodation could be in for a rates hike.

The idea has been voted forward 16-1 in the council’s annual plan amendment. The changes will be implemented in the 2026 to 2027 rating year if it goes through public consultation.

Council spokesperson Richard MacLean said the absence of a central register made the identification of short-term accommodation providers “enormously challenging” and limited the effectiveness of the policy change.

A budget of $100,000 was available to identify the homes, which included tracking short-term accommodation providers and contacting them about the rates.

The council would monitor compliance by setting up an online register, cross-referencing online booking sites, working with body corporates, and information provided by ratepayers.

MacLean said the rates change would have no impact on residential ratepayers, and it would reduce the amount paid by other commercial ratepayers.

It’s a move already made by Auckland Council which started charging online accommodation providers an Accommodation Provider Targeted Rate (APTR) in 2019.

The rate is based on a graduated scale and depend on the number of nights a property is booked and the capital value of the property.

Michael Crosby, head of public policy for Airbnb New Zealand, said its affordable accommodation was a vital component of the tourism economy.

Councillor Geordie Rogers believed the rates increase was fair to other accommodation providers.

In 2019, Airbnb provided accommodation to more than 40% of all international visitors to Aotearoa. The platform contributed almost $200 million to the Wellington economy and supported around 1000 jobs.

“Wellington residents are already facing double digit rates rises and this proposal will inflict further financial pain on mum and dads who list their homes to help make ends.”

Councillor Geordie Rogers said the decision was about fairness.

Hotels and motels provided the same amenities but were being charged “far more” than accommodation through Airbnb, despite having similar impacts on the council’s resources, he said.

“The number of people coming in, the extra cars on the road, the use of the water, all are things that a hotel pays extra for and we don't see Airbnb owners paying the same.”

The move could play a small role in fixing Wellington’s housing shortage, and he hoped more properties to rent would be on the market as a result.

“Some Airbnb owners could reconsider what they're using those stand-alone houses for and, while not incredibly significant, we could expect to see a small shift towards residential properties for rent instead.”

Tony Randle, the only councillor who voted against the proposal, said the decision was unfairly picking on people who chose to rent out a room for a night.

“What about plumbers who use their garage to repair plumbing? What about people who are sitting at home doing craft work to sell? Shouldn't they be deemed commercial?”