Holiday home company Bachcare has advice that there is a legal basis for
challenging the Auckland Council's decision to hit holiday homes with business and targeted rates.
Holiday homes are facing rates hikes of between 200 per cent and 300 per cent following the council's decision to introduce targeted rates for online accommodation providers as well as now having a proportion of their rates classed as business rates, the company said today.
The council's targeted rates, also called the bed tax, is based on the value of the property, its location, and the number of bed nights it was booked for in the past year.
It applies to homes and self-contained units but not single rooms in a larger home or properties which are rented out fewer than 28 days a year.
Some Aucklanders are making nearly $80,000 a year from renting their properties on Airbnb, council figures show.
The council says the new charges are still being refined, and it has encouraged ratepayers to appeal if they feel they have been overcharged.
Bachcare, a full-service holiday home management company, says it believes the basis of the decision is flawed.
Bachcare founder Leslie Preston said they have taken advice and are currently seeking further clarification from lawyers on Bachcare's options to protect the rights of holiday home owners in Auckland and around New Zealand.
"Our advice suggests that the council has not followed a robust decision-making approach in implementing the new rates, and has come up with a flawed outcome. We do not believe the rate is fair or equitable nor do we believe council's final policy for commercial rates is robust.
"Our holiday home owners don't oppose short term rental accommodation providers contributing to tourism funding but the method being used is unfair and unjustifiable.
"We also are confused as to why half the short-term rental market in Auckland is excluded. Hosted "room only" accommodation providers should also be categorised in the same way as "entire home" accommodation providers are.
"What logic did the council use to impose rates on holiday home providers but not on room only accommodation providers?"
Preston says she is well aware other New Zealand regions are watching the outcome of the Auckland decision.
She says it is important that someone is standing up to protect the rights of holiday home owners and that local councils are held to account to ensure they have robust decision making processes that fully comply with relevant laws.