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

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

Short-term rentals through platforms like Airbnb and VRBO have become increasingly popular in Kaikoura, New Zealand. However, before starting a rental business, it's crucial to understand the local regulations and zoning laws. This article will explore the specific rules and guidelines for operating a short-term rental in Kaikoura.

Starting a Short-Term Rental Business in Kaikoura

When establishing a short-term rental business in Kaikoura, there are several key factors to consider:

• Research local regulations: Check with the Kaikoura District Council for specific zoning laws and ordinances related to short-term rentals. Some areas may have restrictions on the type of property that can be rented or the length of stays allowed.
• Obtain necessary permits: Depending on the nature of your rental, you may need to apply for a resource consent from the council. This is particularly important if you plan to rent out an entire dwelling rather than just a room in your home.
• Understand tax obligations: Income earned from short-term rentals is taxable in New Zealand. Be sure to keep accurate records and declare your rental income to the Inland Revenue Department (IRD). GST may also apply if your annual income exceeds $60,000.
• Ensure safety standards: As a host, you are responsible for providing a safe environment for your guests. This includes complying with building codes, fire safety regulations, and health standards. Consider installing smoke alarms, providing fire extinguishers, and maintaining proper sanitation.
• Create a rental agreement: Develop a clear and comprehensive rental agreement outlining your terms and conditions. This should cover rules regarding pets, smoking, maximum occupancy, and any other expectations you have for guests.

Real estate forums like Bigger Pockets and Reddit can be valuable resources for connecting with other short-term rental owners in Kaikoura and learning from their experiences. For example, one host on Bigger Pockets shared:

"I've been running a successful Airbnb in Kaikoura for the past two years. My biggest piece of advice is to stay on top of the local regulations and be proactive in communicating with the council. It's also important to provide a high-quality experience for your guests - go above and beyond with amenities and personal touches."

By carefully researching the regulations, obtaining necessary permits, and prioritizing guest satisfaction, you can build a thriving short-term rental business in the beautiful coastal town of Kaikoura. Remember to stay informed about any changes to local laws and adapt your business practices accordingly.

Short-Term Rental Licensing Requirements in Kaikoura, New Zealand

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

1. Determine if your property is eligible for STR use: Check the Kaikoura District Plan to see if your property's zone allows for visitor accommodation. Most residential zones require resource consent to operate an STR.
2. Obtain resource consent if required: If your property is not in a business zone, you will likely need to apply for resource consent from the Kaikoura District Council before operating an STR. The resource consent process assesses the potential effects of your STR on the neighborhood.
3. Register your STR with the council: All STR operators in Kaikoura must register their property with the Kaikoura District Council by completing a Visitor Accommodation Registration Form. This form collects key details about your STR property and operation.
4. Pay the Visitor Accommodation Targeted Rate: STR operators are subject to a targeted rate to help fund tourism infrastructure and services in Kaikoura. The exact rate amount is still being determined by the council as of June 2024.
5. Comply with building and safety standards: Your STR must meet all relevant building codes, have working smoke alarms, provide fire evacuation information to guests, and obtain a current Building Warrant of Fitness if required. Specific health and safety requirements for STRs are still being developed.

To register your STR and apply for any required consents, submit your completed forms and supporting documents to the Kaikoura District Council:

In-person: 96 West End, Kaikoura 7300
By email: kdc@kaikoura.govt.nz
By post: PO Box 6, Kaikoura 7340

Resource consent application fees vary depending on the complexity of your proposal, but typically range from $1,000-$4,000. The council aims to process non-notified resource consent applications within 20 working days.

Penalties for operating an unregistered or unlicensed STR in Kaikoura may include:

1. Fines of up to $300 per day for unregistered STRs (once the council's revised fee schedule takes effect)
2. Potential legal action for operating an STR without required resource consent, with fines of up to $600 per day under the Resource Management Act

So in summary, the key requirements to legally run an STR in Kaikoura are:

1. Checking if your property is eligible
2. Obtaining resource consent if needed
3. Registering with the council and paying the targeted rate
4. Meeting building and safety standards

Non-compliance can result in significant daily fines. Always check with the Kaikoura District Council for the most up-to-date STR licensing information and requirements.

Required Documents for Kaikoura Short-Term Rentals

To apply for a short-term rental license in Kaikoura, you will need to submit the following documents to the Kaikoura District Council:

1. Visitor Accommodation Registration Form: This form collects key details about your STR property and operation, including the property address, contact information for the owner/ property manager, maximum guest capacity, and parking arrangements. The form is available on the council website.
2. Resource Consent Application (if required): If your property is not in a business zone that automatically allows visitor accommodation, you will need to apply for resource consent. The application requires providing details about your proposed STR operation, a site plan, an assessment of environmental effects, and the written approval of affected neighbors (if applicable). Resource consent application forms are available from the council.
3. Building Warrant of Fitness (if required): If your STR is in a building that requires a Building Warrant of Fitness under the Building Act 2004, you must provide a copy of the current warrant to demonstrate compliance with building safety and accessibility standards. Contact the council to determine if your building requires a warrant.
4. Proof of Ownership or Permission: You must provide evidence that you are the legal owner of the STR property or have the owner's permission to operate an STR. This could include a copy of the property title, a signed lease agreement, or a letter from the owner granting permission for STR use.
5. Site Plan: A detailed site plan of your STR property, showing the location and dimensions of buildings, parking areas, outdoor spaces, and any proposed signage. The site plan helps the council assess the suitability of your property for STR use and any potential impacts on the surrounding area.
6. Floor Plan: A floor plan of your STR, clearly labeling the rooms to be used for guest accommodation, any shared spaces, and the location of smoke alarms and fire evacuation routes. The floor plan is important for assessing the safety and suitability of your STR layout.

Submit all required documents, along with your completed Visitor Accommodation Registration Form, to the Kaikoura District Council either in person at 96 West End, Kaikoura, by email to kdc@kaikoura.govt.nz, or by post to PO Box 6, Kaikoura 7340. The council will review your application and notify you of any additional requirements or the outcome of your registration.

Failing to provide all required documents may result in delays or rejection of your STR license application. If you have any questions about the required documents or the application process, contact the Kaikoura District Council directly for assistance.

Kaikoura Short-Term Rental Taxes

When operating a short-term rental in Kaikoura, it's crucial to understand the applicable taxes and their implications for your business. The two main types of taxes that apply to STRs in Kaikoura are Income Tax and Goods and Services Tax (GST).

Income Tax

All income earned through your STR is subject to income tax. The rental income you receive will be taxable, less any deductible expenses related to the rental activity. The tax rate depends on your total taxable income and ranges from 10.5% to 39%.

If your rental income tax liability (known as "residual income tax" or RIT) exceeds NZ$5,000 but is less than NZ$60,000 at the end of the tax year, you will become a provisional taxpayer from the beginning of the following tax year. This means you will need to make provisional tax payments throughout the year to avoid interest charges.

Goods and Services Tax (GST)

If your total gross rental income from your STR exceeds NZ$60,000 in a 12-month period, you must register for GST. Once registered, you will need to charge 15% GST on your rental income and file regular GST returns with the Inland Revenue Department (IRD).

From 1 April 2024, under IRD's GST Marketplace Rules, Airbnb will collect and remit 15% GST on the accommodation price and cleaning fees for listings in New Zealand. For hosts not registered for GST, Airbnb will pass through an 8.5% flat-rate credit to compensate for GST on costs incurred. GST-registered hosts who have provided their GST number to Airbnb will not receive this credit, as they can claim GST on expenses in their own GST returns.

Write-Offs and Deductions

To reduce your tax liability, you can claim deductions for expenses directly related to your STR business. These may include:

1. Rates and insurance
2. Agent fees and platform commissions
3. Repairs and maintenance (excluding capital improvements)
4. Mortgage interest (subject to interest limitation rules)
5. Depreciation on chattels (e.g., furniture and appliances)
6. Utilities and cleaning costs
7. Marketing and advertising expenses
8. Accounting and legal fees

It's important to keep accurate records of all income and expenses related to your STR to support your tax deductions. Consult with a tax professional to ensure you are claiming all eligible deductions and meeting your tax obligations.

By understanding the applicable taxes and available deductions, you can effectively manage your STR's tax compliance and optimize your financial position. Stay informed about any changes to tax laws and regulations that may impact your STR business in Kaikoura.

New Zealand Wide Short-Term Rental Rules

In addition to Kaikoura-specific regulations, short-term rental operators need to be aware of national rules that apply across New Zealand. Here are the key things to know:

Goods and Services Tax (GST) Changes - "App Tax"

1. As of April 1, 2024, new GST rules nicknamed the "App Tax" apply to short-term rentals booked through online platforms like Airbnb and Bookabach.
2. The online platform is required to collect 15% GST on all bookings, regardless of the host's GST registration status.
3. For non-GST registered hosts, the platform will provide an 8.5% flat-rate credit of the GST collected. The remaining 6.5% is paid to the IRD.
4. GST-registered hosts will receive rental income net of GST and return it as a zero-rated supply. They can continue claiming GST on expenses.

Income Tax

1. All short-term rental income is taxable and must be declared, even if irregular.
2. Expenses like insurance, rates, repairs, interest, and fees can be deducted, but only for the portion of the year the property was rented.
3. If the property is used both personally and as a short-term rental, the "mixed-use asset" rules may apply.
4. If earning under $4,000 annually, the income does not need to be declared, but expenses cannot be claimed either.
5. The short-stay standard-cost method provides a fixed nightly rate to cover costs, with no tax on income up to that rate. Tax is paid on anything earned above the rate, with no deductions.

Residential Tenancies Act and Rental Agreements

1. Short-term rentals are not covered under the Residential Tenancies Act, so specific short-term rental agreements are needed.
2. Agreements should cover payment terms, number of guests, house rules, smoking policies, liability, etc.
3. Tenants cannot sublet a property on Airbnb without the landlord's explicit written permission.

Building Act and Resource Consent

• If separating part of a home for exclusive short-term rental use, building consent may be required to ensure Building Code compliance, including fire safety and accessibility.
• Creating a self-contained unit likely requires resource consent as it is considered a second residential activity on the property.

Other Rules and Resources

• Councils may require short-term rentals to be registered and may have other regulations to follow.
• Insurance, health and safety, and local rules around parking, noise, etc. also need to be considered.
• Government resources are available to help determine which rules apply:
  - Short-stay accommodation overview: Flowchart of which rules apply to different situations
  - Short-stay standard-cost method: Eligibility criteria and how to apply it

In summary, while Kaikoura has its own set of STR regulations, hosts must also comply with New Zealand's national rules around taxation, rental agreements, building standards, and more. Carefully review which rules apply to your specific situation and consult with local authorities, a lawyer, and an accountant to ensure full compliance when starting and operating your STR business.

Does Kaikoura Strictly Enforce STR Rules?

Based on discussions among Airbnb hosts on forums like Bigger Pockets and Reddit, it appears that Kaikoura does enforce its short-term rental regulations, but not as strictly as some other New Zealand cities. While Kaikoura requires STR operators to obtain resource consent and register with the council, a number of hosts report operating without full compliance.

One host on Bigger Pockets shared, "I've been running an unregistered Airbnb in Kaikoura for over a year now and haven't had any issues with the council. As long as you keep a low profile and avoid disturbing the neighbors, you can usually fly under the radar."

However, another host cautioned, "Just because some people get away with it doesn't mean it's risk-free. I know of a few cases where the council has cracked down on unregistered STRs after receiving complaints. It's not worth the potential fines in my opinion."

Compared to cities like Queenstown which have implemented strict nightly limits and zoning restrictions on short-term rentals, Kaikoura is relatively more Airbnb-friendly. The registration process, while somewhat tedious, is not as prohibitive as in other popular tourist destinations.

That said, Kaikoura's STR policies do appear to be evolving. Recent discussions in council meetings suggest a move towards heavier regulation and enforcement to address housing affordability concerns. One council member was quoted on Reddit saying, "We need to find a better balance. While tourism is vital to Kaikoura's economy, we can't ignore the impacts of holiday homes sitting empty most of the year while locals struggle to find accommodation."

So in summary, while Kaikoura does have STR regulations on the books, enforcement to date has been somewhat patchy, allowing a number of unregistered Airbnbs to operate. However, all signs point to the council taking a stricter stance moving forward. For hosts, working proactively with the council to ensure compliance is likely the wisest approach for long-term STR success in Kaikoura.

How to Start a Short-Term Rental Business in Kaikoura

Starting a short-term rental business in Kaikoura requires careful planning and execution. Follow these steps to set yourself up for success:

• Research local regulations: Familiarize yourself with Kaikoura's specific rules for STRs. Determine if your property is eligible for STR use and what permits or consents you may need to obtain from the Kaikoura District Council. Attend council meetings or reach out to the planning department for guidance on the application process and any upcoming changes to STR policies.
• Develop a business plan: Outline your business goals, target market, unique selling points, financial projections, and marketing strategy. Conduct market research to assess demand, competition, and pricing in Kaikoura. Use tools like BNBCalc for data-driven insights into Kaikoura's STR market to inform your business plan.
• Choose a business structure: Decide whether to operate as a sole proprietorship, partnership, or limited liability company (LLC). Consult with a lawyer and accountant to determine the best structure for your situation. An LLC can provide personal liability protection and tax advantages, making it a popular choice for STR businesses.
• Register your business: Once you've chosen a business structure, register your STR business with the New Zealand Companies Office and obtain a New Zealand Business Number (NZBN). Consider registering a trade name for your STR business to establish a strong brand identity.
• Obtain necessary licenses and permits: Apply for a resource consent from the Kaikoura District Council if required for your property. Register your STR with the council and pay the applicable Visitor Accommodation Targeted Rate. Begin the consent process early, as it can take several weeks or months to secure approval.
• Set up accounting and taxes: Open a separate bank account for your STR business and choose an accounting software to track income and expenses. Register for GST if your annual revenue exceeds NZ$60,000 and familiarize yourself with income tax obligations. Hire a bookkeeper or accountant to ensure proper financial management and tax compliance.
• Furnish and equip your rental: Invest in quality furniture, linens, and amenities that cater to your target market. Ensure your STR meets all building and safety standards, including smoke alarms and fire evacuation information. Highlight unique amenities or local experiences in your listing to stand out from competitors.
• Create a strong listing: Craft an engaging property description and take high-quality photos that showcase your STR's best features. Optimize your listing title and description for search keywords. Consider hiring a professional photographer to capture stunning images of your property.
• Automate your operations: Utilize vacation rental software to streamline tasks like booking management, guest communication, cleaning coordination, and dynamic pricing. Look for software that integrates with multiple booking platforms to centralize your reservations and avoid double bookings.
• Launch and market your listing: List your property on popular STR platforms like Airbnb and Bookabach. Develop a marketing plan to drive direct bookings through your own website and social media channels. Encourage satisfied guests to leave reviews and recommendations to build trust and credibility with potential guests.

By following these steps and continuously adapting to market conditions and guest preferences, you can build a thriving STR business in Kaikoura. Remember to prioritize compliance, guest experience, and operational efficiency to achieve long-term success.

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

For any questions or concerns regarding short-term rental regulations and zoning in Kaikoura, your primary point of contact is the Kaikoura District Council. Here's how to reach them:

• Phone: Call 03 319 5026 during business hours (Monday to Friday, 8:30am to 4:30pm). If you have an urgent issue outside of these hours, you can still call this number and choose from the options in the automated message.
• Email: Send an email to kdc@kaikoura.govt.nz. The council staff will do their best to respond to your inquiry as soon as possible.
• In Person: Visit the council offices at Level 2, 96 West End, Kaikoura. The offices are open Monday to Friday, 8:30am to 4:30pm, except on public holidays.
• Post: Send mail to Kaikoura District Council, PO Box 6, Kaikoura 7340, New Zealand.

For specific departments related to short-term rentals:

• Planning and Regulations: For questions about resource consents, zoning, and building compliance, contact the planning department at 03 319 5026.
• Rates and Finance: For inquiries about the Visitor Accommodation Targeted Rate and other council fees, contact the finance team at 03 319 5026 or email rates@kaikoura.govt.nz.

In addition to contacting the council directly, connecting with other short-term rental hosts in Kaikoura can provide valuable insights and support. Consider joining these online communities:

• Kaikoura Airbnb Hosts Facebook Group: This local Facebook group is a great place to ask questions, share experiences, and stay updated on STR regulations in Kaikoura. You can request to join the group at https://www.facebook.com/groups/kaikouraabnbhosts/.
• VRMB Community: While not specific to Kaikoura, the Vacation Rental Marketing Blog (VRMB) Community is an excellent resource for professional vacation rental managers. Founded by industry expert Matt Landau, this paid membership community offers forums, courses, and networking events. Learn more at https://vrmb.com/community/.
• Bigger Pockets Short-Term Rental Forum: Bigger Pockets is a popular real estate investing platform with a dedicated forum for short-term rental owners. You can find discussions on various topics, including regulations, marketing, and property management. Check it out at https://www.biggerpockets.com/forums/530-short-term-rentals.

By staying in touch with the Kaikoura District Council and actively participating in online host communities, you can ensure that you're always up-to-date on the latest STR regulations and best practices in Kaikoura.

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

While there are limited discussions specifically about Kaikoura's short-term rental regulations on platforms like Reddit and Bigger Pockets, insights can be gleaned from hosts' experiences in other locations facing similar regulatory environments. Here are a few relevant threads that provide context on how hosts navigate local STR rules:

• r/AirBnB on Reddit: "Airbnb Hosts Try to Evade City Regulations, From Copenhagen to Catalonia": This thread discusses the challenges of enforcing STR regulations in various European cities. Hosts note that some cities, like Berlin, have eased restrictions due to the difficulty of tracking non-compliant listings without cooperation from platforms like Airbnb. This suggests that even in places with strict rules on the books, actual enforcement can be patchy.
• Bigger Pockets Forums: "Short-Term & Vacation Rental Discussions": While not specific to Kaikoura, the Bigger Pockets STR subforum is a hub for hosts to discuss regulatory challenges and share strategies. Common themes include the importance of thoroughly researching local zoning laws, building positive relationships with neighbors and local officials, and staying adaptable as regulations evolve.

Although direct accounts from Kaikoura hosts are limited, the broader conversations among STR operators indicate that navigating local regulations is a key concern for many. Successful hosts emphasize the importance of proactive compliance, community engagement, and contingency planning to mitigate the risks of changing rules.

As Kaikoura's STR market matures and regulations crystallize, more location-specific discussions are likely to emerge on forums like Reddit and Bigger Pockets. In the meantime, prospective hosts can learn from the experiences shared by operators in other markets facing similar regulatory dynamics.

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.