Airbnb bed tax in place - Is Airbnb still a profitable option?

The Auckland council has introduced a new targeted rate for online accommodation providers like Airbnb to bring them in line with hotels and motels.

Under the new scheme which has left more than a few Airbnb vendors furious and out of pocket Auckland Airbnb properties will now be taxed as a business. Properties rented out for more than six months of a year will be treated like businesses and charged up to $7200 inline with Hotel rates. Overall the tax will vary depending on how many nights you rent out the property during the year as per the graph below.

For more info on "APTR" go here

How it works:

Number of nights booked per year

​APTR rates level

​General rates level

​Up to 28 ​Does not apply ​Continue to be rated as residential
​29 to 135 ​25% of APTR if the property is in zone A or B ​Rated as 75% residential and 25% business
136 to 180 ​50% of APTR if the property is in zone A or B ​Rated as 50% residential and 50% business
​More than 180 ​100% of the APTR if the property is in zone A or B ​Rates as business


The new tax - the Accommodation Provider Targeted Rate (APTR) - was being applied from July 2018, because all rates are set on the basis of what happens the previous year. So in effect you will be getting a bill for the last 12 months if you had registered your property as an Airbnb in the 2017/18 year period.

Simple enough just don't tell them you're doing it? If you do not register your Airbnbs with the Council, do not think you will get away with it forever. According to their website they will be searching websites and working with commercial accommodation providers and body corporates to help identify residential property owners involved.

We think a $7,000 tax every year on your Airbnb property would take the meat out of using the short stay service if you have chosen to Airbnb your investment property full time and at the least will make you think twice if the effort is worth it. If you want us to do the numbers and see how we could take the problem off your hands and provide a consistent income with no hassle why not give us a call on 09 3735400 or call Jay direct on 021 836087.

RTA Bill (No 2) & Our Thoughts

The Residential Tenancies Amendment Bill (No 2) is currently with the Select Committee (a group of MP’s from different political parties) to hear public submissions on the Bill. All submissions were to be in by 22 August 2017 so now were waiting for the report which is due on the 29th Mar 2018.

This bill amends the Residential Tenancies Act 1986 to address issues related to liability for damage to rental premises caused by a tenant, methamphetamine contamination in rental premises, and tenancies over rental premises that are unlawful for residential use.


There are three main parts to the Bill:

  1. Tenants Liability for damage
  2. Unlawful residential premises
  3. Methamphetamine in rentals


In particular, the bill aims to:

  • Make it easier for landlords to test their properties for methamphetamine.
  • Allow tenants to end their tenancy if test results show unsafe levels of methamphetamine contamination.
  • Create regulation-making powers about methamphetamine testing.
  • Clarify tenants’ liability for careless damage they may cause.
  • Strengthen the law to help prosecute landlords who rent out unlawful residential premises.

The second to last point is our main concern as we are already seeing cases where the courts are requiring the owner to prove that tenant’s damage to their property was “intentional”. Which would be impossible to prove unless you somehow legally recorded them doing it? I very much doubt they will be confessing to wilful damage. A good example of this is here: https://www.landlords.co.nz/article/6365/reckless-damage-by-tenants-not-intentional

A story where the tenants sprayed graffiti on the walls, smoked inside leaving cigarette holes in the carpet among other damage and the High Court ruled it “accidental damage”

Now more than ever you will need professional management with skilled and knowledgeable property managers who run a tight ship and whose number one agenda is the best care and best return for their client.

Talk to us today if you have concerns about how these changes may affect you and your rental property.

Impact Pending

In an article published at Landlords.co.nz today, Miriam Bell talks about the pending impact of a NZ First / National coalition. In our opinion the effect of NZ Firsts policies to reduce or remove the LVR restrictions + reduced immigration tied to international investors buying up property will positively impact the Auckland housing market allowing for increased local confidence in buyers and a more stable selling market. It's all guessing at this stage so lets see what Winston does. Full article below.


Wednesday 27 September 2017

Uncertainty is set to continue while coalition talks take place but one industry commentator thinks the impact of the election on the property market can be largely predicted.

By Miriam Bell

Property Institute chief executive Ashley Church said that NZ First’s position as “King or Queen maker” mean that its policy positions will feature – whether Winston Peters picks National or Labour as a coalition partner.

“While the coalition talks are all about negotiating positions, Peters will have considerable leverage over both parties. “So there are some bottom lines that we can reasonably expect to find their way into any final agreement.” In Church’s view, these are likely to include some type of ban on residential property sales to foreign buyers; a moratorium on capital gains taxes; increased focus on state involvement in increasing housing supply and the creation of one or more Urban Development Authorities.

Peters’ views on immigration are well known so a reduction in immigration numbers will be on the cards, he said. A reduction in immigration numbers could have an impact on demand pressures in the housing market. Additionally, Peters has said he wants to make radical changes to the Reserve Bank which would appear to involve making currency intervention a major part of the Reserve Bank’s role. It could also involve setting targets around housing and job creation. Church said that all of these policies would have an impact on the housing market – but the effect of some would be much more significant than others. “Reducing immigration inflows and amending the Reserve Bank’s targets, in particular, are likely to have a sustained impact on the market. “What’s less clear is whether that impact will flow through into the broader economy and slow down economic growth”.

While NZ First doesn’t have a formal policy on the Reserve Bank’s LVR restrictions, Church said he thinks they could be relaxed over the next 12 months. “NZ First policy puts a big emphasis on getting young people into their first home – so I’d expect to see the LVRs gone or heavily reduced as part of a suite of policies to achieve that”. In the heat of campaigning both National and Labour indicated that it might be time for the Reserve Bank to consider reviewing the LVRs. However, the Reserve Bank has said it believes that the LVRs are still needed. At the same time, many economists have voiced their view that, given financial stability concerns, the time has not yet come to lift the LVRs.