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

Starting a Short-Term Rental Business in Christchurch

Christchurch, the largest city on New Zealand's South Island, is a popular tourist destination known for its English heritage, gardens, and nearby natural attractions. Many property owners in Christchurch are interested in starting short-term rentals on platforms like Airbnb and VRBO to capitalize on the tourism market. However, there are several regulations to be aware of:

• Short-term rentals are allowed in residential zones if the property is the host's primary place of residence. This means you must live in the property for at least 6 months per year.
• If the property is not your primary residence, you can only rent it out short-term for a maximum of 60 nights per year. This is to prevent residential properties from being converted entirely into vacation rentals.
• You must apply for resource consent from the Christchurch City Council to operate a short-term rental, even if it's your primary residence. The application fee is NZ$1,500.
• All short-term rentals are subject to a targeted accommodation rate on top of the standard residential rates. As of 2021, this was an additional 0.5% of the property's capital value.
• Short-term rentals must comply with building and fire safety requirements, including having working smoke alarms, fire extinguishers, and clear evacuation routes.
• You may need to collect and remit GST (goods and services tax) on your rental income if your total turnover exceeds NZ$60,000 per year. The standard GST rate is 15%.

These regulations were put in place to balance the economic benefits of short-term rentals with concerns about housing affordability and neighborhood character. Christchurch has experienced a surge in short-term rentals in recent years, with over 4,000 active listings as of 2019.

Navigating the rules can be complex, so many hosts choose to work with short-term rental management companies to handle permitting, taxes, and compliance. It's also important to communicate with neighbors and follow best practices for being a responsible host. With the right planning and approach, short-term rentals can be a good way to earn extra income from your Christchurch property.

Short-Term Rental Licensing Requirements in Christchurch

To operate a short-term rental in Christchurch, you must apply for resource consent from the Christchurch City Council, even if the property is your primary residence. The specific requirements depend on whether the rental is hosted (owner lives on-site) or unhosted, and the number of nights per year it is rented.

Here are the key requirements:

Hosted STRs (up to 8 guests):

Generally a permitted activity, meaning no resource consent is needed. However, you must notify the Council and keep records of rental nights.

Unhosted STRs in residential zones:

1. Rented for 60 nights/year or less: Controlled activity, resource consent required but cannot be declined.
2. Rented for 61-180 nights/year: Discretionary activity, resource consent required and can be declined based on impacts.
3. Rented for 181+ nights/year: Non-complying activity, resource consent required.

Unhosted STRs in rural zones:

1. Rented for 180 nights/year or less: Permitted activity, no resource consent needed.
2. Rented for 181+ nights/year: Discretionary activity, resource consent required.

To apply for resource consent, you must submit an application to the Christchurch City Council along with the required fee. As of 2023, the deposit for a visitor accommodation consent ranges from NZ$1,500 to $3,000 depending on the activity status. Additional fees may apply if the processing time exceeds the initial deposit.

Processing times vary but are typically 20 working days for controlled activities and 20-60 working days for discretionary activities, provided all required information is submitted.

It's important to obtain resource consent before operating a STR, as there are penalties for non-compliance. The Council can issue abatement notices, infringement fines of up to $1,000, or prosecute serious breaches with a maximum fine of $600,000.

In summary, most STR operators in Christchurch will need to apply for resource consent and pay the associated fee, unless they are only providing hosted accommodation. The Council's website has detailed information on the application process and requirements.

Required Documents for Christchurch Short-Term Rentals

To apply for a resource consent to operate a short-term rental in Christchurch, you will need to submit the following documents to the Christchurch City Council:

1. Completed application form: Fill out the "Application for Resource Consent: Short-term Visitor Accommodation in a Residential Zone" form, which can be downloaded from the Council's website. This form collects essential information about your property and the proposed short-term rental activity.
2. Certificate of Title: Provide a copy of the Certificate of Title for the property, which must be less than 3 months old. This document proves your ownership of the property and can be obtained from Land Information New Zealand (LINZ).
3. Site plan: Submit a site plan showing the location of parking and outdoor areas associated with the short-term rental. This helps the Council assess the potential impacts on the surrounding neighborhood.
4. Floor plan: Include a floor plan of the unit or house being used for short-term accommodation. This allows the Council to understand the layout and capacity of the rental.
5. Guest instructions: Provide a copy of the instructions that will be given to guests, covering matters such as check-in procedures, parking arrangements, use of outdoor areas, noise controls, and health and safety information. These instructions demonstrate how you will manage the rental to minimize disturbance to neighbors.
6. Operator details: If the property will be managed by someone other than the owner, include the name and contact details of the appointed operator. This ensures the Council can contact the responsible party if any issues arise.
7. Deposit fee: Pay the required deposit fee when submitting your application. As of 2023, the deposit ranges from NZ$1,500 to $3,000 depending on the activity status of your short-term rental. Additional fees may apply if processing takes longer than expected.

These documents help the Christchurch City Council assess your application and determine the potential effects of your short-term rental on the surrounding area. Providing all the required information upfront can help streamline the process and avoid delays.

Remember to check the District Plan rules and talk to the Council's Duty Planner if you have any questions about the specific requirements for your property. With the right documentation and approach, you can successfully navigate the resource consent process for your Christchurch short-term rental.

Christchurch Short-Term Rental Taxes

When operating a short-term rental business in Christchurch, there are two main types of taxes to be aware of: income tax and Goods and Services Tax (GST).

Income Tax

All income you earn from providing short-term accommodation, such as through Airbnb or Bookabach, is taxable and must be declared in your income tax return. The amount of tax you pay depends on your total taxable income and corresponding tax rate. As of the 2023 tax year, the income tax rates are:

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

You can claim deductions for expenses directly related to earning your rental income, such as property rates, insurance, interest on a mortgage, repairs and maintenance, cleaning fees, and Airbnb service fees. If the property is used for both rental and private purposes, you can only claim a portion of the expenses based on the amount of time it was rented out.

Goods and Services Tax (GST)

If your short-term rental income exceeds NZ$60,000 in a 12-month period, you must register for GST. The current GST rate is 15%, which you would need to charge on top of your rental price and pay to the Inland Revenue Department (IRD).

If you are GST-registered, you can claim back the GST on expenses related to your rental activity. However, if you sell the property or change its use from taxable to non-taxable (e.g. switch to long-term renting), you may need to pay GST on the sale price or change of use.

From 1 April 2024, GST will apply to all short-term accommodation provided through online platforms like Airbnb, regardless of the host's GST registration status. The platform will collect and remit the GST, paying a "flat-rate credit" to non-registered hosts to avoid double taxation.

Possible Deductions and Write-Offs

In addition to the expenses mentioned above, you may be able to claim deductions for:

1. Depreciation on furniture and fittings used in the rental
2. Accounting and tax preparation fees
3. Marketing and advertising costs
4. Bank fees for a dedicated rental account
5. Legal expenses related to the rental
6. Home office costs if you manage the rental from home

It's important to keep accurate records of all income and expenses related to your short-term rental. Consult with a qualified tax professional to ensure you are meeting your tax obligations and claiming all eligible deductions. With proper planning and record-keeping, you can maximize the profitability of your Christchurch short-term rental business.

New Zealand Wide Short-Term Rental Rules

In addition to Christchurch-specific regulations, short-term rental hosts in the city must also comply with national laws and requirements. Here are some key New Zealand-wide rules to be aware of:

1. Residential Tenancies Act: Short-term rentals are generally not covered by the Residential Tenancies Act, which governs long-term tenancies. However, if you rent out your property for more than 90 days to the same guest, the tenancy will automatically fall under the Act. This means you must meet additional requirements around property condition, tenancy termination, and more.
2. Income Tax: All income earned from short-term rentals, even if it's just a one-time rental, is taxable and must be declared in your income tax return. The amount of tax owed depends on your total taxable income. You can claim deductions for expenses directly related to the rental, such as a portion of mortgage interest, rates, insurance, and maintenance.
3. Goods and Services Tax (GST): If your short-term rental income exceeds NZ$60,000 in a 12-month period, you must register for and charge GST at the standard rate of 15%. This also allows you to claim back GST on related expenses. Note that providing additional services like meals or cleaning may require GST registration even if you're under the income threshold.
4. Mixed-Use Asset Rules: If you rent out a holiday home that's also used privately and sits empty for part of the year, special "mixed-use asset" tax rules apply. Under these rules, the expenses you can claim are based on the proportion of rental vs. private use. If your rental income is under $4,000 a year, you can choose to not declare it, but then you can't claim any expenses either.
5. Health and Safety: While not legally required, it's a good idea for short-term rental hosts to have a health and safety plan in place. This includes things like making sure the property is safe and well-maintained, having working smoke alarms, providing emergency contact information to guests, and complying with any local council requirements around building safety.
6. Insurance: Standard home and contents insurance may not cover damage or liability related to paying guests. Talk to your insurance provider about getting appropriate cover for a short-term rental. Some hosting platforms like Airbnb provide a certain amount of damage protection and liability insurance, but additional cover is still recommended.

It's important for Christchurch short-term rental hosts to understand and comply with these national regulations in addition to local council requirements. Failing to do so could result in fines, tax penalties, or legal liability. If in doubt, consult with a qualified legal or tax professional for guidance.

Does Christchurch Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and Bigger Pockets, it appears that Christchurch is not particularly Airbnb-friendly compared to some other cities in New Zealand. The city has implemented relatively strict rules around short-term rentals, especially for unhosted properties.

While Christchurch allows hosted rentals (where the owner lives on-site) for up to 8 guests as a permitted activity, unhosted rentals in residential zones are limited to just 60 nights per year before requiring resource consent. In rural zones, the limit is 180 nights. These caps are lower than in many other jurisdictions.

Hosts on Reddit have expressed frustration with the "restrictive" rules, with some claiming Christchurch has "the most restrictive in Australasia". There is a sense that the city is cracking down on STRs to prioritize long-term rentals and housing affordability.

However, enforcement of the rules seems to be a challenge. As one researcher pointed out, the new regulations "lack teeth" because it is labor-intensive for the Council to identify non-compliant listings. Without requiring platforms like Airbnb to share data or remove illegal listings, the rules rely heavily on hosts to self-report.

This has led some to argue the rules are "easy to dodge" for hosts willing to flout them. While most responsible hosts appear to be complying and obtaining necessary consents, it's likely that a portion are operating under the radar to avoid the 60/180 night caps and associated costs.

Overall, while Christchurch has a robust regulatory framework aimed at curbing the impact of short-term rentals, the city is constrained in its enforcement capabilities. The rules have undoubtedly made the STR environment more restrictive than before, but determined hosts can still find ways to operate, either within or around the law. Compared to other major centers, Christchurch is definitely on the less welcoming end for Airbnb.

How to Start a Short-Term Rental Business in Christchurch

Starting a short-term rental business in Christchurch can be a rewarding venture, but it's important to follow the proper steps to ensure compliance with local regulations. Here's a step-by-step guide:

1. Determine your property's eligibility: Check if your property is located in a residential zone where short-term rentals are permitted. If you're renting out a room in your primary residence (hosted rental), you can generally host up to 8 guests without needing resource consent. For unhosted rentals, you'll need resource consent if renting for more than 60 nights per year in residential zones or 180 nights in rural zones.
2. Obtain necessary consents: If required, apply for resource consent from the Christchurch City Council. You'll need to submit an application form, Certificate of Title, site plan, floor plan, guest instructions, and operator details. The application deposit ranges from NZ$1,500 to $3,000 depending on the activity status. Processing times are typically 20-60 working days.
3. Prepare your property: Ensure your property meets all building and fire safety requirements, such as working smoke alarms, fire extinguishers, and clear evacuation routes. Consider any upgrades or amenities that will make your rental more appealing to guests, such as high-quality furnishings, fast Wi-Fi, and well-equipped kitchens.
4. Set up your listing: Choose a platform like Airbnb or Bookabach to list your property. Take high-quality photos and write an accurate, enticing description. Clearly outline your house rules, check-in/out procedures, and cancellation policy. Set competitive rates based on similar listings in your area.
5. Arrange cleaning and maintenance: Develop a thorough cleaning checklist and schedule to ensure the property is spotless between guests. You can do this yourself or hire a professional cleaning service. Have a plan for regular maintenance and quick repairs to avoid negative reviews.
6. Comply with tax obligations: Register for an IRD number and include your rental income in your annual tax return. If your income exceeds NZ$60,000 per year, you'll need to register for and charge GST. Keep accurate records of all income and expenses, and consult a tax professional for guidance on deductions.
7. Obtain appropriate insurance: Contact your insurance provider to ensure you have adequate coverage for short-term rentals. This may include public liability, property damage, and loss of income insurance. Some platforms like Airbnb provide a certain level of host protection, but additional coverage is recommended.
8. Provide excellent customer service: Respond promptly to inquiries and booking requests. Offer helpful local recommendations and be available to address any issues that arise during a guest's stay. Encourage satisfied guests to leave positive reviews, as this will help attract future bookings.

Tips for success:

• Start small and scale up gradually as you gain experience and positive reviews.
• Be transparent about any potential noise or disruption to neighbors, and have a plan to mitigate issues.
• Consider using dynamic pricing tools to optimize your rates based on demand.
• Invest in small touches that will wow guests, like local treats or personalized welcome notes.
• Stay up-to-date on any changes to local regulations or tax laws that could affect your business.

By following these steps and prioritizing compliance and guest satisfaction, you'll be well on your way to running a successful short-term rental business in Christchurch.

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

If you have questions about short-term rental regulations and zoning in Christchurch, here are some key contacts and resources:

Christchurch City Council

• General enquiries: Call 03 941 8999 or 0800 800 169 anytime
• Non-urgent enquiries: Submit a message online at ccc.govt.nz/contact-us
• Duty Planner (for resource consent queries): Email dutyplanner@ccc.govt.nz
• Building Services Team (for change of use notifications): Email building@ccc.govt.nz

Online Resources

• Summary of short-term rental rules: ccc.govt.nz/assets/Documents/The-Council/Plans-Strategies-Policies-Bylaws/Plans/district-plan/Proposed-changes/2020/PC4/Plan-Change-4-Summary-of-rules.pdf
• Detailed information on providing visitor accommodation: ccc.govt.nz/consents-and-licences/resource-consents/resource-consent-activities/residential-and-housing/providing-guest-accommodation
• Christchurch District Plan: ccc.govt.nz/districtplan

Host Communities and Resources

• Christchurch Airbnb Hosts Facebook group: facebook.com/groups/ChristchurchAirbnbHosts
• New Zealand Airbnb Hosting Forum on Bigger Pockets: biggerpockets.com/forums/783/topics/new-zealand-airbnb-hosting
• r/AirBnB_NewZealand subreddit: reddit.com/r/AirBnB_NewZealand

These online communities are great places to connect with other local hosts, ask questions, and stay up-to-date on regulatory changes and best practices.

If you need professional assistance navigating the resource consent process, consider contacting a planning consultancy like Planz Consultants. They have experience helping short-term rental owners comply with Christchurch's new rules.

Remember, it's crucial to understand and follow the regulations to avoid potential fines and to be a responsible operator. Don't hesitate to reach out to the Council or tap into host communities if you need clarification or support. With the right resources and guidance, you can successfully manage a compliant short-term rental in Christchurch.

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

Based on discussions in online forums, it appears that many Airbnb hosts in Christchurch are frustrated with the city's relatively strict short-term rental regulations:

In a Reddit thread titled "Airbnb slams Christchurch's new house sharing rules as 'most restrictive in Australasia'", several commenters expressed support for Christchurch's approach:

• "Sounds like Christchurch has been doing something right."
• "Renting out a spare room occasionally is one thing, but if you're running a hotel, you should be regulated like one."

However, others felt the rules were too restrictive and would hurt profitability for hosts.

Another Reddit post asked "Why are we not talking about AirBnB when it comes to the property market?" While not specific to Christchurch, commenters noted that some cities like Christchurch have implemented regulations to make Airbnbs "comply with similar regulations as other providers." This suggests Christchurch's rules are seen as more comprehensive than other areas.

On the Bigger Pockets New Zealand Airbnb Hosting Forum, there are a few posts discussing the challenges of operating in Christchurch under the new rules:

• One host asked about the best way to structure longer-term stays to avoid guests gaining tenant rights after 28 days. This indicates some are trying to find workarounds to the limits on unhosted nights.
• Others discussed the general pros and cons of Airbnb hosting, with one noting that a "well-run Airbnb" can earn "two-to-three times" a long-term rental, but requires more work. The 60-180 night caps likely make this tougher to achieve in Christchurch.

In a thread on Auckland's bed tax, a commenter argued that services like Airbnb are "turbocharging" housing affordability issues and need to be tightly restricted, as Christchurch has done.

Overall, the sentiment among Christchurch hosts seems to be that the city's rules are quite restrictive compared to other markets, making it harder to turn a profit, especially with unhosted rentals. While some see this as a necessary response to housing pressures, active hosts are frustrated and looking for ways to maximize revenue within the limits. The rules are spurring discussions about the best business models and practices for operating in a tightly regulated environment.

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.