Airbnb host exodus warning if Wellington council rates jump

Tuesday, 18 March 2025

Julie Wilson says it will no longer be viable to run her Khandallah Airbnb if Wellington City Council rating changes go through.

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Wellingtonians who turned to Airbnb to pay soaring rates may soon have to find another way to make ends meet as the council looks at an extra Airbnb charge.

The Wellington City Council is currently looking at charging short-term accommodation providers such as Airbnb hosts commercial instead of residential rates. Commercial rates are generally 3.7-times higher than residential rates.

A council spokesperson said there would be no financial gain to the council from the proposed change because, after the initial $100,000 to identify short-term providers, any money made would be used to lessen other commercial rates. The change was to “clarify our existing policy”.

The council meets today to send a new long-term plan out for public feedback, with the Airbnb proposal on the table, along with many other issues including social housing funding, saving the Begonia House and bike lanes.

Charlotte, who asked that her last name not be used, has an Airbnb in Paparangi, a northern suburb of Wellington City. Over the past six or seven years her annual residential rates went from $2425 to just over $5500.

She ran an Airbnb but stopped it when Covid hit, only to return to it to make ends meet when rates surged. Wellington City average rates have risen by 12.8%, 8.8%, 12.3% then 18.5% over four consecutive years. Nine more years of increased rates are forecast.

Charlotte said she made about $2000 to $3000 profit from her Airbnb each year but, if the commercial rate was applied, her rates bill would jump from $5500 to more than $20,000 a year. She would simply stop running her Airbnb.

Wellington was busy over the weekend with the Homegrown waterfront concerts one of the draws.

She got about $120 per night from guests. For many it was a more affordable option than staying in a hotel, she said.

Khandallah host Julie Wilson runs a lower North Island Facebook group for Airbnb hosts and said the typical host was not a major commercial enterprise.

Since the Wellington City Council started talking about the 3.7 multiplier, she had been contacted by people doing short-term rentals to help pay rising council rates and elderly people to help make ends meet.

She predicted an Airbnb exodus, including herself, if the new rates were applied as it would end up costing people to host them. The city was packed during the weekend due to Homegrown and the Wellington Weet-Bix Kids TRYathlon, which showed that short-term accommodation was needed to make up for a shortfall in traditional accommodation such as hotels, she said.

Many of her guests were not traditional tourists, including out of town workers such as electricians and engineers, people visiting relatives, and those in town for medical treatment.

Her two-bedroom Airbnb was rented for about $200 a night but, once the 13% Airbnb charge, higher insurance, income tax and GST was taken out, it was not a big money-maker, she said

In 2022, David Perks from Wellington NZ raised the alarm about the lack of accommodation in the city.

Perks, now the business development general manager for Tākina, this week said the convention centre had brought in a big number of visitors but the drop in the government market had dropped visitor nights, meaning it balanced out.

But the accommodation shortage would likely soon come if another hotel was not opened. Services like Airbnb helped the city on capacity weekends when big events were on, he said.