Wellington Airbnb host cries foul over planned rates hike

Monday, 17 March 2025

Emma Reid is imploring the Wellington City Council to back down from a plan to charge Airbnb hosts the same rates as hotels. 'We are the little grapes versus the big bananas,” she says.

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Aro Valley Airbnb host Emma Reid is crying foul as the Wellington City Council looks to increase her annual rates bill from $11,000 to $40,000.

The council is meeting on Tuesday to lock in a new draft long-term plan to send to public consultation as it deals with a groaning wallet mixed with a need to have funds available to rescue the city after a natural disaster.

The last long-term plan collapsed in late 2024 after the sale of the council’s 34% stake in Wellington Airport, which its financial plans were based on, was overruled in a vote that created new rifts among the already-fractured council.

The Government has sent in an observer to make sure this amended long-term plan is properly handled. Items now up for saving or cutting include the Botanic Garden’s Begonia House, the scale and speed of new bike lanes, a harbour quays bus corridor, redeveloping Frank Kitts Park, fixing suburban centres, and much more.

But one area where the council can take more revenue, on top of existing plans for years of rates rises, is charging short-term accommodation providers – such as Airbnb hosts – commercial instead of residential rates. Commercial rates are 3.7-times higher than residential rates.

The council pointed out that changes, which were a clarification of existing policy, were not intended to take in more money but “slicing the rates pie in a fair and equitable way and not increasing the pie”.

Options to go to consultation include whether the commercial rates should apply to the entire property even if only part of it, such as a granny flat, is used for short-term accommodation.

For Reid – who has filed a quirky, prop-filled video submission to the council opposing the changes – she said it will mean her rates going from about $11,000 to $40,000 a year and make continuing with Airbnb no longer possible. After expenses her two small Airbnbs made $18,000 to $24,000 a year.

“It would cost me to run them so a lot of people would just pull out.”

She said it was unfair that Airbnb hosts should have to pay the same rates as a hotel, which could spread the cost over multiple rooms.

Councillor Geordie Rogers backs the hike, saying it is a commercial charge for a commercial activity.

“We are the little grapes versus the big bananas,” she said.

Pukehīnau/Lambton ward councillor Geordie Rogers supported the higher rates with the argument that Airbnb was a commercial activity.

Guests used council-funded services such as pipes and roads so it was fair they helped pay for them.

There was no evidence that short-term accommodation filled a gap in the market due to a shortage of conventional accommodation. If that was the case, there would have been an increase in Wellington visitors when Airbnb and similar services came into being, he said.

Fellow ward councillor Nicola Young said the 3.7 multiplier on commercial rates was “outrageous” and the highest in New Zealand.

“Maybe council should look at ways to stop spending rather than ways to extract money from ratepayers,” she said.

Councillor Iona Pannett, also a Pukehīnau councillor, was yet to decide how she would vote on the Airbnb rates but said Reid’s situation highlighted an equity issue where small operations, such as a small Airbnb hosts or dairy owners, paid the same as larger commercial operators.

A council spokesperson said its preferred option was to exclude attached units such as granny flats but, even if they were not excluded, only the short-term rented portion would get the higher rates.

“Therefore, under no circumstances would someone with an Airbnb attached to their home pay commercial rates on the whole property,” the statement said.

“It’s unlikely that the changes have a substantial impact on the long -term rental market.”