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

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

Queenstown, New Zealand is a popular tourist destination known for its stunning natural beauty, adventure sports, and vibrant hospitality scene. Many property owners in Queenstown are eager to capitalize on the strong demand for short-term rentals by listing their homes on platforms like Airbnb and VRBO. However, it's crucial to understand the local laws, regulations, and zoning codes that govern short-term rentals before getting started.

Starting a Short-Term Rental Business in Queenstown

To legally operate a short-term rental in Queenstown, you'll need to navigate a variety of rules set by the Queenstown Lakes District Council (QLDC). The specific regulations depend on factors like the property's location, zoning, and how many nights per year you plan to rent it out.

In most residential zones, if you want to rent out your entire home for short stays, you'll need to obtain a resource consent from the QLDC. The number of nights you can operate depends on the zone:

• Lower Density Suburban Residential Zone: Up to 90 nights per year with controlled activity resource consent. 91-180 nights requires restricted discretionary consent. Over 180 nights is a non-complying activity.
• Medium Density Residential Zone: Same as above.
• High Density Residential Zone: Easier to get consent for over 180 nights compared to low/medium density zones, often up to 365 nights per year.
• Arrowtown Residential Historic Management Zone: Same 90/180 night thresholds as low/medium density zones.

If your short-term rental meets the definition of a "Homestay" where you host guests in your own primary residence, the rules are more relaxed. In this case, you can host up to 5 paying guests per night without needing resource consent, as long as you register with the QLDC and follow other standards like keeping rental records.

It's important to check if your property is part of a unit title complex or body corporate. If so, you need to ensure the body corporate rules allow short-term rentals, as some disallow it entirely. The 90 nights per year exception may also be "extinguished" if any other unit in the complex is already doing short-term rentals.

Other key requirements for short-term rentals in Queenstown include:

1. Notifying neighbors of your rental activity
2. Providing a mobility parking space
3. No heavy vehicles or passenger service vehicles over 12 people
4. Maximum guest numbers based on property size
5. Only hosting one group at a time
6. Restrictions on outdoor lighting and activities to protect neighbor privacy

The QLDC is expected to ramp up enforcement against illegal short-term rentals that don't comply with the District Plan rules. Violations can result in fines up to $300,000.

Before listing your property, it's wise to consult with a professional planner to determine the exact rules for your unique situation.

In summary, while operating a short-term rental in Queenstown can be highly profitable, it's essential to carefully review the regulations, obtain proper approvals, and stay compliant to avoid costly penalties. With some upfront due diligence, you can build a successful and legally-sound rental business in this world-class destination.

Short-Term Rental Licensing Requirements in Queenstown

To legally launch and operate a short-term rental in Queenstown, property owners must navigate a variety of rules and regulations set by the Queenstown Lakes District Council (QLDC). The specific licensing requirements depend on factors like the property's location, zoning, and the number of nights per year it will be rented out.

Here's a detailed breakdown of the STR licensing process in Queenstown:

1. Determine your property's District Plan zone and review the specific rules that apply. The main residential zones and their STR regulations are:

1. Lower Density Suburban Residential Zone: Up to 90 nights per year with controlled activity resource consent. 91-180 nights requires restricted discretionary consent. Over 180 nights is a non-complying activity.
2. Medium Density Residential Zone: Same as above.
3. High Density Residential Zone: Easier to get consent for over 180 nights compared to low/medium density zones, often up to 365 nights per year.
4. Arrowtown Residential Historic ManagementZone: Same 90/180 night thresholds as low/medium density zones.

2. If your STR meets the definition of a "Homestay" where you host guests in your own primary residence, you can host up to 5 paying guests per night without needing resource consent. However, you must register with the QLDC and follow standards like keeping rental records.

3. To register as a Homestay, submit the online registration form on the QLDC website. There is no fee for registering. Once registered, you can begin operating your Homestay STR.

4. For whole-home STRs in residential zones, you'll need to obtain resource consent from the QLDC. For stays up to 90 nights per year, a streamlined registration process is available if you meet certain standards:

1. Maximum guest numbers based on property size
2. Only hosting one group at a time
3. No heavy vehicles or passenger service vehicles over 12 people
4. Restrictions on outdoor lighting and activities to protect neighbor privacy
5. Appointing a local property manager
6. Notifying neighbors of your STR activity

5. The streamlined registration for 90 nights or less has no upfront fee, but the QLDC will increase your property rates by approximately 25% once approved. You must also file annual records of all lettings with the QLDC.

6. For STRs operating more than 90 nights per year, a formal resource consent is required. The application often requires neighbor approval and a comprehensive assessment by the QLDC. Consent processing fees start at $1,500 and go up based on the complexity.

7. Once you have obtained the proper registration or resource consent, you must continue to comply with all STR standards, keep accurate records, and pay the increased property rates.

The QLDC has signaled it will be ramping up enforcement against illegal short-term rentals that violate the District Plan rules. Operating an STR without the required registration or resource consent can result in significant penalties:

1. Fines up to $300,000 under the Resource Management Act
2. Abatement notices ordering the STR activity to cease
3. Retroactive rates increases charged at the STR level, even if consent was never obtained

In February 2017, the QLDC identified around 300 unregistered STRs and gave the owners a chance to voluntarily comply. By July 2017, nearly 50 of those properties still remained unregistered. The QLDC issued infringement notices to those owners, demonstrating its willingness to penalize rule-breakers.

To avoid costly fines and ensure compliance, Queenstown STR operators should carefully review the regulations, submit the required registrations and consent applications, pay the necessary fees, and strictly adhere to all standards. Consulting with a professional planner can help navigate the complexities of the system.

Required Documents for Queenstown Short-Term Rentals

To apply for a resource consent to operate a short-term rental in Queenstown, you'll need to submit the following documents to the Queenstown Lakes District Council (QLDC):

1. Completed Resource Consent Application Form: This is the main application document where you provide details about your proposed STR, including the property address, number of nights per year, maximum occupancy, and contact information. The form can be downloaded from the QLDC website.
2. Certificate of Title: A copy of the property's Certificate of Title, no more than 3 months old. This proves your legal ownership of the property. You can obtain a copy from Land Information New Zealand (LINZ).
3. Assessment of Environmental Effects (AEE): A written assessment describing the potential effects your STR may have on the environment, including noise, parking, traffic, and neighborhood character. The AEE should also explain how you will mitigate any negative impacts. Professional planning consultants can assist with preparing the AEE.
4. Site Plan: A scaled drawing showing the location of the property boundaries, buildings, parking spaces, outdoor living areas, and any other relevant features. The site plan is used to assess the suitability of the property for STR use.
5. Floor Plan: A scaled drawing of the interior layout of the building, clearly labeling the rooms and detailing any areas to be used for STR purposes. The floor plan helps determine maximum occupancy and compliance with building regulations.
6. Parking Plan: Details on the number and location of off-street parking spaces to be dedicated to the STR. The QLDC has specific parking requirements based on the number of bedrooms.
7. Building Evacuation Scheme: For STRs that are part of a multi-unit building, an evacuation scheme approved by Fire and Emergency New Zealand may be required. This demonstrates that fire safety has been considered.
8. Noise Management Plan: A plan detailing how you will manage noise from your STR guests to avoid disturbing neighbors. This could include quiet hours, instructions to guests, and a complaint handling process.
9. Body Corporate Approval: If your property is part of a unit title development, written approval from the body corporate committee is required, confirming that STR use is permitted under the body corporate rules.
10. Neighbor Approval: While not always required, written approval from surrounding neighbors can help demonstrate that your STR has neighborhood support. This is especially helpful if you are seeking consent for a high number of nights.

The specific documents required may vary depending on your property's characteristics and the nature of your proposed STR. It's recommended to have a pre-application meeting with a QLDC Duty Planner to confirm the necessary documents before lodging your resource consent application.

Once you have compiled all the required documents, you can submit your application via the QLDC's online application portal. The council will then assess your application against the relevant District Plan rules and either grant or decline the resource consent.

Queenstown Short-Term Rental Taxes

When operating a short-term rental in Queenstown, it's crucial to understand the various taxes that apply to your business. The two main types of tax you need to be aware of are income tax and Goods and Services Tax (GST).

Income Tax

All income you earn from renting out your property, even for short stays, is subject to income tax in New Zealand. The amount of tax you'll pay depends on your total taxable income for the year, which includes your STR earnings. The current 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 deduct eligible expenses related to your STR business from your rental income, which reduces your overall taxable income. Common deductions include:

1. Mortgage interest (subject to new rules being phased in)
2. Insurance
3. Utilities
4. Cleaning and maintenance costs
5. Airbnb service fees
6. Supplies for guests
7. Depreciation on furniture and appliances

It's important to keep accurate records of all your STR income and expenses to properly calculate your taxable income at year-end.

Goods and Services Tax (GST)

If your total income from your STR business and any other taxable activities exceeds NZ$60,000 in a 12-month period, you must register for and charge GST at 15% on all your rental charges.

Once GST registered, you can claim back the GST on any expenses related to your STR. However, you must also file regular GST returns (usually every 2 months) and pay the GST collected from guests to Inland Revenue.

New "App Tax" on Online Bookings

As of April 1, 2024, a new law requires online booking platforms like Airbnb and Booking.com to collect and remit GST at 15% on all STR bookings made through their sites, regardless of whether the property owner is GST registered or not. This has been nicknamed the "App Tax."

If you are GST registered, Airbnb will handle the GST and you no longer need to add it to your rates. You report the Airbnb income as zero-rated for GST.

If you are not GST registered, Airbnb will pass on an 8.5% "flat rate credit" to you to approximate what you could claim back if you were GST registered. The other 6.5% goes to Inland Revenue.

In summary, as an STR operator in Queenstown, you will always pay income tax on your net rental profits. GST of 15% also applies once you exceed $60,000 in annual taxable supplies. The new "App Tax" rules mean GST is always charged on online bookings, with the platform handling the collection.

To minimize your taxes, keep detailed records and claim all eligible deductions against your rental income. When in doubt, consult with a qualified tax professional to ensure you are meeting all your tax obligations.

New Zealand Wide Short-Term Rental Rules

While there are currently no nationwide laws or regulations specifically governing short-term rentals (STRs) in New Zealand, there have been recent proposals and developments aimed at creating a more consistent national approach.

In February 2020, Airbnb released a position paper calling for the creation of a national regulatory framework for STRs in New Zealand. Key proposals included:

1. A national "home-sharing exemption" allowing STRs in primary residences with no restrictions or permits required
2. Simplified safety standards and compliance certificates for STRs in non-primary residences like holiday homes
3. A national data sharing framework between STR platforms and government to inform policy decisions and support compliance

While the government has not yet implemented these specific proposals, they demonstrate a growing recognition of the need for clearer and more standardized STR rules across the country.

One area where nationwide changes are coming is taxation. From April 1, 2024, new Goods and Services Tax (GST) rules will apply to all STRs facilitated through online marketplaces like Airbnb, regardless of the host's GST registration status. Key points include:

• Airbnb and other STR platforms will be required to charge and remit GST at 15% on all bookings
• STR income will be zero-rated for GST for hosts who are GST-registered
• Hosts not GST-registered will receive an 8.5% "flat rate credit" from Airbnb to approximate claimable expenses, with Airbnb remitting the other 6.5% to Inland Revenue

This "Airbnb tax" or "app tax" ensures GST is collected on all STR stays booked online, with the compliance burden shifted from hosts to the platforms.

Outside of these developing national proposals and rules, STR regulations in New Zealand currently fall under the purview of local councils. This has resulted in a patchwork of different policies and bylaws across the country.

For example, Queenstown Lakes District Council requires resource consent for STRs operating more than 90 nights per year in most residential zones, with tiered application processes based on the number of nights. In contrast, Christchurch City Council is still in the process of debating new STR restrictions and requirements.

Other common council rules and requirements seen across New Zealand include:

• Limits on the number of days per year a property can be used for STRs
• Caps on the number of STRs allowed in certain areas or zones
• Minimum parking, safety, and amenity standards for STR properties
• Neighbor notification and approval processes
• Requirement to keep records of all stays and guests

As STRs continue to grow in popularity across New Zealand, it's likely the push for more consistent nationwide rules will continue. However, for now, STR hosts must navigate a mix of existing local regulations and new national tax requirements. Consulting with the local council and tax professionals is advised to ensure compliance with all applicable rules.

Does Queenstown Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and BiggerPockets, Queenstown appears to have a relatively strict and unfriendly stance towards short-term rentals compared to many other cities in New Zealand and around the world.

The Queenstown Lakes District Council (QLDC) has implemented a number of rules and restrictions on STRs in recent years in an effort to protect long-term rental housing supply and preserve neighborhood character. These include:

• Requiring resource consent for whole-home STRs operating more than 90 nights per year in most residential zones
• Tiered application and fee structures based on number of rental nights
• Increased property rates (taxes) for registered STRs
• Stringent parking, occupancy, and operating requirements

While some STR owners have complained about the "red tape" and costs associated with obtaining resource consent, the QLDC has shown a willingness to crack down on rule-breakers. In 2017, the council identified around 300 unregistered STRs and gave the owners a chance to voluntarily comply. When nearly 50 remained unregistered several months later, the QLDC issued abatement notices ordering them to cease operations or face fines up to $300,000.

This enforcement action, along with the council's public statements, demonstrate that Queenstown is serious about reining in illegal and noncompliant STRs. The regulations have made it more difficult and expensive for casual homeowners to list their properties on Airbnb compared to the past.

However, this hasn't completely stopped determined hosts from finding ways to skirt the rules. Anecdotally, some owners still operate STRs without the proper registration or resource consent, betting that they won't get caught. Others exploit potential loopholes, such as listing their property as a "homestay" while rarely being present or renting out secondary dwellings on their land.

Despite this, the consensus among local property investors is that operating a fully compliant STR in Queenstown is getting harder, not easier. The council's relatively strict policies and enforcement have made Airbnb a less attractive and viable option for many would-be hosts. As a result, Queenstown is now seen as one of the least Airbnb-friendly major destinations in New Zealand.

This contrasts with more permissive locations like Rotorua or Taupo, which have been slower to enact and police STR regulations. In those markets, a much higher proportion of residential homes are used for short-term rentals, with less fear of council backlash.

So in summary, while Queenstown's STR restrictions are not airtight, the council does appear to be following through on enforcement more than many other cities. The growing difficulty and risk of running a non-compliant Airbnb have made Queenstown an increasingly challenging place for hosts compared to the past. As a result, the city is now viewed as relatively anti-Airbnb, especially in the context of the broader New Zealand market.

How to Start a Short-Term Rental Business in Queenstown

Starting a short-term rental business in Queenstown can be a lucrative venture, but it requires careful planning and adherence to local regulations. Follow these steps to successfully launch your Queenstown short-term rental:

• Determine your property's eligibility: Check your property's zoning and review the Queenstown Lakes District Council (QLDC) District Plan to ensure short-term rentals are permitted. If your property is part of a unit title development, confirm that the body corporate rules allow short-term rentals.
• Register with the QLDC: If your property qualifies as a "Residential Visitor Accommodation," register with the QLDC using their online form. This applies to whole-home rentals for less than 90 nights per year. For "Homestay" accommodations (renting rooms while you reside in the property), use the separate Homestay registration form.
• Obtain resource consent (if required): For whole-home rentals exceeding 90 nights per year, you'll need to apply for resource consent from the QLDC. The application process varies based on the number of rental nights and may require neighbor approval and a comprehensive assessment. Consult with a professional planner to navigate this process.
• Comply with safety and building regulations: Ensure your property meets all building code requirements, including fire safety systems, hygiene facilities, and access routes. If you're changing the property's use (e.g., from residential to bed and breakfast), notify the QLDC Building Services Team.
• Prepare your property for guests:Furnish and equip your rental to provide a comfortable and inviting experience. Consider hiring a professional photographer to showcase your property's best features. Develop a comprehensive property guide with house rules, local recommendations, and emergency contacts.
• Choose a property management approach: Decide whether you'll manage the rental yourself or hire a professional property management company. Firms like Bachcare and Luxury Stays Queenstown offer full-service management, handling listings, bookings, cleaning, and guest communication.
• List your property on short-term rental platforms: Create listings on popular platforms like Airbnb, Bachcare, and Bookabach. Optimize your listings with compelling descriptions, high-quality photos, and competitive pricing. If you're using a property management company, they will handle this step for you.
• Understand your tax obligations: Short-term rental income is subject to income tax and potentially Goods and Services Tax (GST) if your annual turnover exceeds NZ$60,000. Keep accurate records of all income and expenses, and consult with a tax professional to ensure compliance.
• Obtain appropriate insurance: Contact your insurance provider to ensure your property is adequately covered for short-term rental use. Consider additional liability insurance to protect against guest injuries or property damage.
• Provide exceptional guest experiences: Prioritize guest satisfaction by maintaining a clean, well-maintained property and promptly addressing any issues or concerns. Encourage guests to leave reviews on your listing platforms, as positive reviews are crucial for attracting future bookings.

By following these steps and staying compliant with local regulations, you'll be well on your way to launching a successful short-term rental business in Queenstown. Remember to stay informed about any changes to QLDC rules and requirements, as the short-term rental landscape continues to evolve.

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

If you have questions about short-term rental regulations and zoning in Queenstown, there are several key contacts and resources available:

• Queenstown Lakes District Council (QLDC) Customer Service: For general inquiries about short-term rental rules and registration, contact the QLDC Customer Service team at 03 441 0499 or by emailing services@qldc.govt.nz.
• QLDC Rates Team: For specific questions about how short-term rental use may impact your property rates, email the QLDC Rates team at rates@qldc.govt.nz.
• QLDC Duty Planner: To determine if your property requires resource consent for short-term rental use, contact the QLDC Duty Planner at dutyplanner@qldc.govt.nz. The Duty Planner can help you identify your property's zone and the applicable rules.
• QLDC Building Services Team: If you need to notify the council of a change of use for your property (e.g., from residential to short-term accommodation), email the QLDC Building Services Team at building@qldc.govt.nz.
• Pragmatic Planning Resource Consent Check: Local planning firm Pragmatic Planning offers a free service to advise property owners on what the short-term rental rules are for their specific property. Fill out their online form at https://pragmaticplanning.co.nz/councils-new-short-term-visitor-accommodation-rules-2023-update/ to receive customized guidance.

In addition to these official contacts, there are several online communities where Queenstown short-term rental hosts share experiences and support:

• Queenstown Holiday Home Owners Facebook Group: This private Facebook group is a forum for owners of holiday homes in the Queenstown area to discuss industry news, regulations, and best practices. Request to join at https://www.facebook.com/groups/1644813029104525/.
• Queenstown Airbnb Hosts Facebook Group: Another private Facebook community specifically for Queenstown Airbnb hosts to connect and collaborate. Request to join at https://www.facebook.com/groups/1958144754434251/.
• New Zealand Airbnb Hosting Forum on Reddit: This subreddit is a place for Airbnb hosts across New Zealand to share news, tips, and questions. While not Queenstown-specific, it's a useful resource for keeping up with national trends and regulations. Check it out at https://www.reddit.com/r/AirBnB_Hosting_NZ/.

By engaging with these official contacts and online host communities, you can get answers to your specific short-term rental questions and make sure you're complying with all local regulations. The short-term rental landscape is constantly evolving, so staying connected is key to operating successfully in Queenstown.

What Do Airbnb Hosts in Queenstown Think about Local Regulations?

Based on discussions in online forums like Reddit, Airbnb hosts in Queenstown have mixed feelings about the local short-term rental regulations. While some appreciate the need for rules to protect housing supply and neighborhood character, others feel the requirements are overly burdensome and make it difficult to operate profitably. Here are some key takeaways from Queenstown hosts:

Resource Consent Process:

Many hosts express frustration with the resource consent process required for whole-home rentals over 90 nights per year. One Queenstown host on Reddit described it as "jumping through hoops" and expensive, with application fees over $1,500 plus the ongoing costs of increased property rates. Some feel the consent rules unfairly restrict property rights.

90-Night Rental Limit:

The 90-night annual limit for whole-home STRs without resource consent is a point of contention. Hosts argue this cap makes it challenging to recoup costs and forces them to leave money on the table during peak season. However, others acknowledge the rule allows for some STR use while preventing full-time conversion of housing stock.

Enforcement Concerns:

Some hosts believe the QLDC regulations are not consistently enforced, allowing "rogue" operators to skirt the rules. One local host claimed "the council talks tough but rarely follows through on cracking down on illegal rentals." This perception of lax enforcement frustrates rule-following hosts who have gone through the compliance process.

Housing Affordability:

There is a general recognition among hosts that STRs have contributed to Queenstown's severe housing shortage and affordability crisis. One host admitted "Airbnb has absolutely gutted the long-term rental market" but argued blanket bans weren't the answer. Instead, they suggested incentives for long-term renting and building more dedicated STR complexes.

Airbnb Responsibility:

Some Queenstown hosts feel Airbnb should take more responsibility for the housing issues its platform has amplified. One host criticized Airbnb for "actively fighting any attempt at regulation" and called on the company to better cooperate with the QLDC. However, others argue STRs are just a scapegoat and the real solutions lie in increasing overall housing supply.

While these Reddit discussions provide valuable first-hand perspectives, it's important to note they may not represent the full spectrum of Queenstown host opinions. The lack of Queenstown-specific threads on platforms like BiggerPockets also makes it difficult to gauge broader sentiment among STR investors and operators.

However, the experiences shared by Queenstown hosts echo many of the regulatory challenges and tensions seen in other popular STR markets. As the QLDC and other councils grapple with managing the explosive growth of Airbnb, striking the right balance between property rights and community stability remains an ongoing debate.

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.