Thousands of Auckland properties still not paying Airbnb rate, figures suggest

Tuesday, 24 September 2019

Auckland Council spends $1.2m defending hotel rates

Thousands of property owners liable for Auckland Council's recently introduced Airbnb rate are not paying up, new figures suggest.

Auckland Council staffers have had a tough time tracking properties offering online accommodation, which now fall under the Accommodation Provider Targeted Rate (APTR).

Last July, the council said 1118 online providers were loaded into its database to pay the levy – one of Phil Goff's first initiatives as Auckland Mayor.

However, 3800 properties were believed to be liable, meaning 2682 ratepayers were not stumping up.

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Auckland Council has struggled to identify all properties liable for the extended APTR.

* Auckland Council cannot find all online accommodation providers subject to new rates

* Auckland council targets Airbnb and Bookabach properties for higher rates**

Stuff asked the council for updated numbers and was told 1164 ratepayers were now forking out for some portion of the APTR.

Paired with Auckland Council's earlier estimate, suggesting 3800 properties were liable, the new information indicated 2636 dwellings remained undetected.

The council did not hold an updated estimate, with a spokeswoman telling Stuff no work was being done in this area.

'That [3800] estimate was generated as part of the policy analysis to support consultation on the APTR,' she said.

Auckland Mayor Phil Goff launched the additional rate for hotels soon after he was elected in 2016. The levy was eventually extended to online providers, like Airbnb.

A 2018 Auckland Council report estimated there were at least 12,370 Airbnb listings in the region.

Properties booked between 29 and 135 nights a year paid 75 per cent residential and 25 per cent business rates, plus 25 per cent of the APTR.

Accommodation booked between 135 and 180 nights was liable for 50 per cent of the APTR, as well as a split business-residential rate. Dwellings reserved for more than 180 nights paid the full APTR and were classed as businesses.

If council staff spied a new property suspected of offering accommodation for more than 28 nights, they would send the owner a letter outlining the policy and requesting further information on the property owner's activities.

When Auckland Council first introduced the APTR, it acknowledged online providers got similar benefits from Auckland Tourism, Events and Economic Development's (ATEED) spending as standard accommodation providers.

Last year, Auckland Council's financial policy manager Andrew Duncan told Stuff the APTR was extended to online providers to create an even playing field.

'While traditional providers pay business rates and the APTR, some online providers are paying residential rates and do not pay the APTR,' he said.

'The decision to extend business rates and the APTR to online accommodation sector from July 1 was to address this disparity and will reduce the amount paid by the traditional accommodation sector.'

Auckland Council believed the likes of Airbnb and Bookabach generated an estimated 15 per cent of accommodation sector revenue.

A council paper released in December 2017 pegged the forecast revenue for the accommodation sector at $766 million for that year.

When the APTR was first approved in July 2017, the revenue target was set at $13.45m – 50 per cent of ATEED's budgeted spend on visitor attraction and major events.

In July, Stuff revealed Auckland Council had spent $1.2m fighting court proceedings initiated after the APTR was introduced.

During his 2016 election campaign, Goff pledged the discovery of new revenue streams for the council, originally targeting accommodation providers to raise $28m so ATEED could promote and stage events in Auckland.

Goff later halved the amount when his proposal came before the council. It was voted into his first budget, effective from July 2017.

But the accommodation sector pushed back, arguing that it received only 10 per cent of the benefit from the visitor industry, and that imposing all of the costs in the form of an additional property rate was unlawful.