Auckland, New Zealand Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Auckland, New Zealand?

Short-term rentals like Airbnb and VRBO have become increasingly popular in Auckland in recent years. However, there are a number of regulations and requirements hosts need to be aware of. This article covers the key rules for operating a short-term rental business in New Zealand's largest city.

Starting a Short-Term Rental Business in Auckland

To start renting out your property short-term in Auckland, there are several important steps:

• Register and declare your property with the Auckland Council: You must complete a short-term online accommodation declaration form by July 3, 2024, so the council can correctly assess your rates. Failure to declare could result in being charged the average general accommodation rate.
• Determine if you need to register for GST: If your annual turnover from all taxable activities, including short-term renting, exceeds NZ$60,000, you must register for and file Goods & Services Tax (GST) returns. GST is a 15% tax added to the price of goods and services. You can claim GST on some expenses.
• Understand the tax implications: Income from short-term rentals is taxable under the Income Tax Act 2007. The specific rules depend on the type of property - e.g. renting out your main home, a room in your home, a holiday home, an investment property, etc.
• Comply with the Accommodation Provider Targeted Rate (APTR) if applicable: The Auckland Council charges APTR on properties rented short-term for more than 28 nights per year unless you are only renting a room. The rate depends on the location and number of rooms. APTR is currently suspended until June 30, 2022.
• Create a written short-term rental agreement: Unlike long-term tenancies, short-term holiday rentals are not covered by the Residential Tenancies Act. So you'll need your own rental agreement outlining rules, terms, and conditions. Some platforms like Airbnb provide a template.

An example of how the regulations have impacted the market can be seen on Reddit, where one user noted "Airbnbs don't have to comply to the rigorous healthy homes and tenancy act. No wonder owners prefer Airbnbs." This refers to standards for long-term rentals around heating, insulation, ventilation, etc.

While there aren't explicit health and safety requirements for short-term rentals yet, it's wise to follow the Healthy Home Standards as a guide and check with the council. You may also need to provide items like smoke alarms, fire extinguishers, and emergency contact info.

Overall, the short-term rental market has grown significantly in Auckland, especially in popular areas like the CBD, North Shore, and Waiheke Island. A 2019 Stats NZ report found home sharing accounted for 18.3% of total guest nights in 2018, up from 8.3% in 2013.

But with the growth has come increased regulation and compliance requirements. By understanding and following the rules outlined here, you can operate a successful short-term rental business in Auckland. For any areas of uncertainty, always check with the Auckland Council directly.

Short-Term Rental Licensing Requirements in Auckland

To legally operate a short-term rental in Auckland, hosts must meet several licensing and registration requirements set by the Auckland Council:

1. Register and declare your STR property with the Auckland Council: You must complete an online short-term accommodation declaration form by July 3, 2024, so the council can correctly assess your rates. Failure to declare could result in being charged the average general accommodation rate, which is higher.
2. Determine if you need resource consent: Resource consent may be required depending on factors like how many nights per year you rent, the maximum number of guests, parking provisions, etc. Check with the Auckland Council to see if your property needs resource consent to operate as an STR.
3. Comply with the Accommodation Provider Targeted Rate (APTR) if applicable: The APTR applies to STRs rented for more than 28 nights per year unless you are only renting a room. The rate is based on location and number of rooms. APTR is currently suspended until June 30, 2022.
4. Meet building and safety standards: STRs must comply with relevant building codes, have working smoke alarms, provide fire evacuation information to guests, etc. Specific health and safety requirements for STRs are still being developed.

To submit your STR declaration form and clarify licensing requirements, contact the Auckland Council:

1. Online: Complete the "Short-term online accommodation declaration" form on the Auckland Council website
2. Phone: Call 09 301 0101
3. Email: enquiry@aucklandcouncil.govt.nz

There is currently no fee to register your STR, but you may have to pay higher property rates (the APTR) if you rent short-term for over 28 nights per year. The council advises allowing time to receive any required resource consent before launching your STR.

Penalties for operating an unlicensed or undeclared STR in Auckland include:

1. Being charged the average general accommodation rate on your property (25% business rates), which is significantly higher than standard residential rates
2. Potential fines of up to $20,000 for unconsented STR use of a property, as this violates the Resource Management Act

So in summary, the key requirements to run an STR in Auckland are

1. Registering with the council
2. Obtaining resource consent if needed
3. Paying the APTR if you rent over 28 nights/year
4. Meeting building safety standards.

Non-compliance can result in higher rates and hefty fines. Always check with the Auckland Council directly with any questions about STR regulations and licensing.

Required Documents for Auckland Short-Term Rentals

To legally operate a short-term rental (STR) in Auckland, hosts need to provide the following documents to the Auckland Council:

Short-term online accommodation declaration form - This online form must be completed and submitted to the Auckland Council by July 3, 2024, so they can correctly assess your property rates. The form collects information about your STR property, how many nights per year you plan to rent it, and other details needed to determine your rates category. Failure to submit the declaration form could result in being charged the higher average general accommodation rate.

Proof of resource consent (if required) - Depending on factors like the number of rental nights per year, maximum guests, parking provisions, etc., you may need to obtain resource consent from the Auckland Council to use your property as an STR. The resource consent shows your property complies with the District Plan rules for STRs. Check with the council to determine if your STR needs resource consent.

Evidence of compliance with building and safety standards - While specific health and safety requirements for STRs are still being developed, you need to show your property meets relevant building codes, has working smoke alarms, provides fire evacuation information to guests, etc. Consult with the council on the current building and safety standards STRs must meet.

Short-term rental agreement - Since STRs are not covered under the Residential Tenancies Act, you need to have your own written rental agreement outlining the rules, terms, and conditions for guests. Some booking platforms like Airbnb provide agreement templates, but make sure it is tailored to your situation. The agreement should cover things like payment terms, cancellation policies, guest behavior expectations, etc.

These documents serve to register your STR with the Auckland Council, demonstrate your property is suitable and safe to be rented short-term, and set clear rules for STR guests. Submit the required declaration form and any supporting documentation to the Auckland Council online, by phone (09 301 0101) or by email (enquiry@aucklandcouncil.govt.nz). There is no fee to register, but additional property rates may apply for STRs rented more than 28 nights per year.

Auckland Short-Term Rental Taxes

When operating a short-term rental business in Auckland, there are several types of taxes you need to be aware of and account for:

Income Tax: All income you earn from renting out your property short-term is subject to income tax. The tax rate depends on your total taxable income for the year. For the 2023-24 tax year, the income tax rates are:

1. 10.5% up to $14,000
2. 17.5% over $14,000 and up to $48,000
3. 30% over $48,000 and up to $70,000
4. 33% over $70,000 and up to $180,000
5. 39% over $180,000

You can deduct eligible expenses related to earning your rental income, such as rates, insurance, repairs, and maintenance, to reduce your taxable profit.

Goods and Services Tax (GST): If your annual turnover from all taxable activities, including STR income, exceeds NZ$60,000, you must register for GST. GST is a 15% tax added to the price of goods and services. Once registered, you must charge 15% GST on your rental income, but can also claim back GST on related expenses.

From 1 April 2024, STR marketplace operators like Airbnb and Bachcare must collect GST on behalf of hosts, even if the host earns under $60,000/year. Hosts not GST-registered will receive an 8.5% flat-rate credit from the operator to cover GST claimable on expenses.

Accommodation Provider Targeted Rate (APTR): The Auckland Council charges an APTR on properties rented as STRs for more than 28 nights per year, unless you are only renting a room in your house. The APTR amount depends on the property location and number of bedrooms. As of 2023, the APTR is suspended until 30 June 2024.

Potential Deductions: You can claim deductions for expenses directly related to your STR business, such as:

1. Advertising and marketing costs
2. Cleaning, laundry, and supplies
3. Rates, insurance, and utilities
4. Repairs and maintenance
5. Depreciation on chattels and equipment
6. Mortgage interest (subject to interest limitation rules)
7. Accounting and tax compliance fees

The percentage of expenses you can claim depends on factors like the floor area rented and the number of nights the property is used for STRs vs private use. Special rules apply for "mixed-use" holiday homes rented short-term and also used privately.

It's important to keep accurate records of all STR income and expenses to correctly calculate your tax obligations. With the growth of STRs in Auckland, tax authorities are increasingly monitoring compliance, so it's wise to consult an accountant experienced in this area. By understanding and budgeting for the applicable taxes, you can maximize the returns from your Auckland short-term rental business.

New Zealand Wide Short-Term Rental Rules

In addition to Auckland-specific regulations, there are several national laws and tax rules that apply to short-term rentals across New Zealand, including in Auckland:

Income Tax: All income earned from STRs is subject to income tax. The tax rate depends on your total taxable income for the year, with rates ranging from 10.5% to 39%. You can deduct eligible expenses like rates, insurance, repairs, etc. to reduce your taxable rental profit. Special rules apply for "mixed-use" holiday homes that are sometimes used personally and sometimes rented out.

Goods and Services Tax (GST): If your annual turnover from all taxable activities, including STR income, exceeds NZ$60,000, you must register for and charge 15% GST on your rental income. You can then claim back GST on related expenses. From 1 April 2024, STR platforms like Airbnb must collect GST on behalf of hosts, even those earning under $60,000/year.

Health and Safety at Work Act 2015: STR hosts have responsibilities to ensure guest health and safety, including identifying and managing hazards, maintaining smoke alarms, providing evacuation instructions, etc. While not legally required yet, it's wise for STRs to meet the Healthy Homes Standards for heating, insulation, ventilation, etc.

Building Act 2004: STRs may require building consent for any renovations or change of use. Hosts must ensure their property complies with the Building Code for things like fire safety, sanitation, structural stability, etc.

Privacy Act 2020: Hosts must protect guest privacy and personal information. Only collect necessary data, store it securely, and don't disclose it without permission.

Consumer Guarantees Act 1993 and Fair Trading Act 1986: STR hosts must accurately represent their property and not mislead guests. Services must be provided with reasonable care and skill. Hosts may be liable if guests suffer loss or damage from an unsafe property.

These national laws, along with Auckland Council requirements around rates, resource consents, etc., create the regulatory framework for STRs in Auckland. It's crucial for hosts to understand and comply with all applicable rules. Penalties for non-compliance can include significant fines, higher council rates, and legal liability. When in doubt, Auckland STR operators should seek advice from the council, a lawyer, or a tax professional.

Does Auckland Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and Bigger Pockets, it appears that Auckland does not strictly enforce its short-term rental rules compared to some other cities. Many hosts seem to operate STRs in Auckland despite not fully complying with the regulations.

On the Bigger Pockets forum, one user noted they had the "Opportunity to buy a six-bedroom house for $580000 NZD in Auckland, New Zealand. Current rent is $1250 a week" with no mention of getting necessary STR permits or paying the Accommodation Provider Targeted Rate. This suggests some hosts run STRs without meeting all the legal requirements.

Reddit users have also observed that Auckland's STR rules often go unenforced. One Redditor commented "This is just one of a number of major problems associated with Airbnb. Another is the fact that, if left unchecked, Airbnb drives up rents and property values, which is pretty much the last thing we need in NZ." Others mentioned the lack of enforcement enables problematic STR situations to persist.

Another Reddit thread highlighted that as of 2019, only a third of liable Airbnb hosts in Auckland were paying the required bed tax. A user pointed out "NZ runs on voluntary compliance, if large international players want to offset their liability to their customers at the expense of NZ, then they should be shown the door."

So in summary, while Auckland has STR regulations on the books, the general consensus is that the city is fairly lax about enforcement compared to other jurisdictions. This allows many hosts to operate STRs without fully complying with the rules around registration, resource consents, taxes, etc. Auckland appears to be relatively Airbnb-friendly from a practical standpoint, even if the official policies suggest otherwise.

How to Start a Short-Term Rental Business in Auckland

Starting a short-term rental business in Auckland can be a lucrative venture, but it's important to follow the right steps. Here's a comprehensive guide:

Research and plan your business

1. Analyze the Auckland STR market, including demand, competition, and pricing.
2. Identify your target guests (vacationers, business travelers, etc.).
3. Develop a detailed business plan with financial projections.
4. Decide if you'll operate as a sole trader or limited company.
5. Use sites like BNBCalc for detailed STR data and insights on the Auckland market.

Choose the right property and location

1. Consider factors like proximity to attractions, transport, and amenities.
2. Ensure the property is in an area zoned for STRs and meets all council requirements.
3. Crunch the numbers to ensure it will be a profitable investment.
4. Look for properties in up-and-coming areas to get ahead of the competition.

Register and obtain necessary licenses and consents

• Register your STR with the Auckland Council by July 3, 2024, using their online form.
• Determine if you need resource consent based on factors like number of nights rented per year.
• Obtain any required building consents for renovations or change of use.
• Start this process early as consents can take time. Consult with the council if unsure.

Set up your business operations

• Open a separate bank account for your STR business.
• Register for GST if your annual turnover will exceed NZ$60,000.
• Determine how you will handle cleaning, laundry, maintenance, guest communication, etc.
• Create a detailed inventory of all furniture, appliances, and supplies.
• Consider using STR management software to automate tasks and streamline operations or hire professional property management companies to do it for you.

Create a standout listing

• Invest in high-quality photos and write an engaging, accurate description.
• Highlight unique selling points like amenities, views, or local experiences.
• Be transparent about your STR's rules, conditions, pet policies, and cancellation policy.
• Look at top-performing listings in your area for inspiration and to benchmark your pricing.

Prioritize the guest experience

• Provide top-notch amenities, fast WiFi, and thoughtful touches.
• Create a digital guidebook with local tips and recommendations.
• Be responsive to inquiries and maintain open communication with guests.
• Encourage guests to leave online reviews and respond promptly to any feedback.
• Small gestures like a welcome gift can make a big impression on guests.

Stay on top of regulations and taxes

• Keep accurate records of all income and expenses.
• Declare your STR income on your tax return and claim eligible expenses.
• Pay the Accommodation Provider Targeted Rate if you rent over 28 nights per year.
• Comply with all health and safety regulations like smoke alarms and evacuation info.
• Work with an accountant experienced in STRs to ensure you're maximizing deductions.

By following these steps and continually optimizing your STR business, you can thrive in the competitive Auckland market. While it takes work, a well-run STR can provide both a rewarding business venture and memorable experiences for your guests.

Who to Contact in Auckland about Short-Term Rental Regulations and Zoning?

If you have questions about Auckland's short-term rental regulations or zoning requirements, here are the key contacts and resources:

Auckland Council

• Phone: 09 301 0101 (available 24/7)
• Email: enquiry@aucklandcouncil.govt.nz
• Online: Submit an enquiry form at https://www.aucklandcouncil.govt.nz/report-problem/Pages/our-contact-details.aspx
• Mail: Auckland Council, Private Bag 92300, Victoria Street West, Auckland 1142

Contact the council to:

• Complete your mandatory online STR accommodation declaration form
• Determine if you need resource consent to operate an STR
• Get clarification on STR rules, rates, and the Accommodation Provider Targeted Rate
• Report an issue with an STR in your neighborhood

Useful Threads and Communities for Auckland STR Hosts

• Airbnb Community Center: https://community.withairbnb.com/
  Connect with other hosts, share stories and tips, and get updates from Airbnb. There are groups for hosts in Australia and New Zealand.
• Airbnb Host Clubs: https://community.withairbnb.com/t5/Auckland/bd-p/en-host-clubs-auckland
  Network with other Auckland STR hosts through Facebook groups and local meetups to exchange advice and strengthen your voice.
• Auckland Airbnb Hosts Forum on Bigger Pockets: https://www.biggerpockets.com/forums/530-short-term-vacation-rental-discussions
  An active forum thread where Auckland hosts discuss STR strategies, regulations, and experiences.
• r/AirBnB Subreddit: https://www.reddit.com/r/AirBnB/
  A Reddit community for Airbnb hosts and guests to share stories, ask for advice, and discuss the STR industry. Look for posts related to Auckland and New Zealand.

By engaging with these official and community resources, you can get answers to your questions, stay up-to-date on Auckland's evolving STR landscape, and learn from the experiences of other local hosts. The council should be your first point of contact for regulatory matters, while the Airbnb and Bigger Pockets communities offer valuable peer support.

What Do Airbnb Hosts in Auckland on Reddit and Bigger Pockets Think about Local Regulations?

Discussions on Reddit and Bigger Pockets provide insight into how Auckland Airbnb hosts view the local short-term rental regulations:

Lack of Strict Enforcement

On Reddit, users have noted that Auckland does not appear to strictly enforce its STR rules compared to some other cities. One commenter observed, "NZ runs on voluntary compliance, if large international players want to offset their liability to their customers at the expense of NZ, then they should be shown the door." Another mentioned as of 2019, only a third of liable Auckland Airbnb hosts were paying the required bed tax.

Impact on Housing Affordability

Auckland hosts acknowledge STRs have impacted housing affordability. A Reddit user shared "Airbnbs don't have to comply to the rigorous healthy homes and tenancy act. No wonder owners prefer Airbnbs." Another noted "if left unchecked, Airbnb drives up rents and property values, which is pretty much the last thing we need in NZ."

Investor-Owned STRs Most Problematic

Some Auckland hosts on Reddit distinguish between different types of operators. Those who live on-site and rent spare rooms see Airbnb income as helpful to afford living in Auckland. However, investor-owned whole-home STRs that would otherwise be long-term rentals are viewed as more damaging to housing supply and community fabric.

Challenging Investment Math

On Bigger Pockets, an Auckland investor noted the numbers are tough for cashflow. They shared an example: "a family home will cost you $500,000 and you can rent it for $500 per week. Loan interest rates are 6%. With this most of the formulas taught in these books do not seem to apply as the rent basically just covers the loan interest." Some Auckland investors have to top up mortgages and rely on appreciation.

Interest in Expansion Opportunities

Despite challenges, some Auckland investors on Bigger Pockets express interest in growing their STR portfolios. One noted the "Opportunity to buy a six bedroom house for $580000 NZD in Auckland, New Zealand. Current rent is $1250 a week" without mentioning permits or additional STR taxes. This suggests certain hosts still see upside in the Auckland market.

So in summary, while Auckland Airbnb hosts recognize the city's STR regulations and impact on housing, many feel the rules are loosely enforced in practice. Hosts are split on whether STRs are a net positive or negative for the community. But the allure of higher yields continues to attract new entrants despite policy efforts to level the playing field.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.