Rome has one, so does New York. The case for Auckland’s bed tax

Wednesday, 27 August 2025

Should the Government say yes to a bed tax? Have your say in the comments below.

ANALYSIS: Want to stay a night in a Manhattan hotel? Take your hotel bill, and add for the tax authorities a 5.875% fee and a flat NZ$3.40 a day.

How about a room with a view of the Golden Gate bridge? Throw on 14% for the San Francisco city treasury.

In Rome, it’s a NZ$20 a night tax for five-star hotels. Berlin raised its tax on tourists to 7.5% a night in January. Partying in Ibiza costs up to NZ$8 a day, if you choose to sleep in a hotel room. Tourist-saturated Japan is rolling out dollars-a-night lodging taxes too.

To stay a night in Auckland? No tax or levy. (Though, international visitors are levied $100 when entering New Zealand.)

Yet Auckland mayor Wayne Brown keeps putting the same question to the Government: could his council charge 2.5% of the cost of each visitor night?

This week, Auckland Council took the bed tax idea a step further, again. Prime Minister Christopher Luxon unequivocally slapped it down, again.

Brown is refusing to budge, however.

The bed night levy idea is supported by numerous business leaders who have spoken with The Post in recent weeks, all who are looking for a solution to Auckland’s sluggish economy. Queenstown wants it, and Local Government New Zealand has lobbied for it.

Hoteliers are interested, also.

Craig Bonnor, managing director of the Cordis Auckland, says his hotel was “certainly open to an industry levy that is done right”.

“By that I mean one that is planned with industry consultation using learning from overseas best practice. It is important that any levy be uniform throughout New Zealand so that visitors travelling around our beautiful country can easily understand it.

“Lastly, the monies raised should go back to the regions earned for tourism purposes. In the case of Auckland that may be tourism marketing and funding for major event bidding. In other regions it may be infrastructure development or whatever the needs are.”

SkyCity chief operating officer Callum Mallett says “we know major events transform cities”.

“So SkyCity is fully supportive of moves to grow funding to support the development and growth of Auckland, including considering a bed levy.”

There also appears to be public support for a bed tax.

A Freshwater Strategy poll in June found that 54% of people supported a 2.5% visitor levy on hotel stays to fund infrastructure and other major events, whereas 20% opposed, and 22% were neutral on the question.

Two in three National Party supporters backed a levy.

The proposed bed night levy, as pitched by Brown in 2024, is a 2.5% to 3% tax that would raise the city around $27 million, and “enable the delivery of a full destination marketing and major events programme”.

In its 2025/26 annual plan, Auckland Council said it had budgeted $16.5m for major events, on the assumption there would be a bed night levy. Without the levy, there would be a $7m shortfall.

This week, Auckland Council pushed again on the bed levy idea, saying if the Government continued to block the proposal, Aucklanders’ rates would rise by 0.4%.

The reason for this: the council was to vote on setting up a $30 million fund for the securing of major events. Without this, SailGP could be lost, the council said.

But, as The Post reported in April, the Government had ruled out a bed tax. At the time it declined to help keep the America’s Cup competition in Auckland, due to it requiring a $75 million or more contribution.

Luxon on Monday asserted Auckland could afford such events funding without the Government legislating for a bed tax.

He pointed to the separation of Auckland Council’s balance sheet from water service provider Watercare, freeing up $800m in debt headroom in years to come.

“I've said upfront, very clearly, we're not looking at a bed tax or a bed levy this term. That's a position of our Government.

“When you look at Auckland Council, which has actually managed its three waters assets and put Watercare into an independent structure that has created $800 million worth of investment opportunity in their own balance sheet.

“They have forever had an events arm Auckland Unlimited, that have brought events to the city, and they can well and truly do that. So I just reject the narrative that that's exactly how it has to be funded.”

Brown, in comments provided to The Post on Tuesday, has been scathing of Luxon’s response.

“He can be the one to tell Auckland ratepayers that their rates should be paying for Taylor Swift instead of maintaining infrastructure and core services like rubbish collection. That is the trade-off Mr Luxon is asking us to make and it’s ridiculous,” he says.

“Mr Luxon’s other suggestion, that we should effectively borrow to pay for major events, is even more absurd. So is the claim that the bed night levy would affect cost of living.

“Those facing cost of living pressures don’t have $500 to go to Taylor Swift concerts nor do they stay in flash hotels, and I am not rating struggling households to fund events they won’t go to.”

He says a bed night levy remained a “non-negotiable” for him and was “still very much on the table” for any Auckland Deal, to be struck between council and Government under the regional deal policy programme.

“The problem is a lack of major events to attract international visitors. That is why Auckland needs a big events incentive to stimulate growth. The benefits will flow on to the national economy.

“We saw that with SailGP, the World Choir Games, and FIFA Women’s World Cup. But these events cost a lot of money to run and require significant investment.”

Luxon has said a “total rethink” of the major events fund, a Government mechanism for supporting large events, is under way, because “it actually takes time to build a pipeline of major events for a country like New Zealand”.

What exactly this means in unclear. In the Government’s “quarter three action plan”, there’s promise of “a one-off major events fund to further boost international visitor numbers and drive economic growth”.

Why is the Government so opposed to a bed tax? Earlier this year, Tourism Minister Louise Upston said the Government had committed to introducing no new taxes this term.

Since, Luxon has simply said now was not the time for a new tax. His office did not respond to questions about this put to it on Tuesday.

Within the Coalition, the ACT Party has confirmed it opposes a bed tax and has informed Upston of this.

NZ First declined to comment on its position.

Other policies that might provide councils revenue are on the horizon.

As per the National-ACT coalition agreement, the Government is currently considering the possible sharing a portion of GST collected on new residential builds with councils.

But, unlike a bed tax, that would require the Government forgoing some of the revenue it collects.

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