Airbnb and Bookabach owners get rates rises of up to 225 per cent as bed tax bites.
Some Aucklanders are making nearly $80,000 a year from renting their properties on Airbnb, council figures show.
The council faced a revolt yesterday over its newly-imposed "bed tax", asking Airbnb owners to pay thousands of dollars more in rates, with some facing increases of between 200 and 300 per cent.
Many began lodging instant appeals after the financial impact was revealed when thousands of property owners received new Auckland Council rates notices following last year's triennial property revaluations.
So far, the council has logged 1118 people who are offering accommodation online. The total figure is far higher – there are an estimated 8000 properties in Auckland which are listed on Airbnb alone.
Of the properties identified so far by the council, 828 are rented out for more than 180 days a year.
At the average charge of $213 a night, this group could be making up to $78,000 in gross income.
Alfred Vergottini rents out two cottages near Muriwai. His rates bill rose from $4000 to $12,000 this year. After he complained, the council agreed to visit his property and reassess their bill.
"We really got a shock," he said. "We've been a bit upset since we saw it. We are still viable, but it seems pretty unfair to be paying $1000 a month in rates.
"Their argument is that it is to pay for Auckland being a great city. But we're not in that market, because we do weddings, we've got a niche market, so we don't actually rely on visitors to Auckland."
Jenny Vergottini and her husband Alfred Vergottini.
Ray Pitch, who rents out part of his Pakuranga home for $95 a night, said he had stopped listing the property after his rates bill jumped from $3600 to $11,000.
He accepted that a tax was necessary, but said it should not be based on the previous year's bookings.
His bookings for last year were "exceptional" because he had some long-term tenants who were working on a construction site nearby. In the next year, he was expecting just a handful of bookings.
"We can't suddenly stop because we need to pay the bill. But we can't keep going at that cost either."
Information supplied by the council said that a $1m property in a prime Auckland location which was making this amount was liable for a bed tax of around $6700.
The bed tax is one part of a double-whammy in new costs for homeowners who rent properties on Airbnb. They are also being charged at partial or full business rates, rather than residential rates – to bring them into line with motels and hotels.
For some, the new charges are unaffordable and they say they will no longer rent out their properties.
The council says the new charges are still being refined, and it has encouraged ratepayers to appeal if they feel they have been overcharged.
Tourism Industry Association chief executive Chris Roberts said ratepayers who were renting out properties for more than half the year were clearly businesses and should be paying their fair share.
His organisation was one of the strongest voices against the bed tax. Once it was introduced, the association successfully lobbied for it to be extended to online accommodation businesses.
"It's a badly designed rate, but it's slightly fairer now," said Roberts.
"The problem is that the rate is far too high, which is why people are feeling the pain.
"When it first came in, we had some of the bigger hotels facing rate rises of half a million dollars a year. They've already gone through this pain, and now it's falling on private providers."
Pitch said that once costs like maintenance and GST were included, the profits from an online accommodation website were much smaller. He estimated that he made $8000 in the last year, which would be completely wiped out by his new rates bill.
Auckland Council's manager of financial policy Andrew Duncan said the council had consulted on the bed tax and 68 per cent of 16,000 submissions were supportive.
"We have taken care to develop a system that reflects the scale of the commercial operation being undertaken so that levels of rates charged are commensurate," he said.
The revenue will fund half of Auckland Tourism, Events and Economic Development's budget for putting on major events and attracting tourists to the city.
Bookabach general manager Peter Miles said his company had flagged concerns that the rate rises would be excessive during the consultation period.
"This has unfortunately occurred to the detriment of Auckland's tourism sector and the mums and dads who let out their baches.
"Without this extra supply of tourism accommodation, we fear the family holiday will get more expensive with less choice for travellers."
