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

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

Short-term rentals through booking platforms like Airbnb and VRBO have become increasingly popular in New Zealand, including in the city of Timaru. However, property owners looking to start a short-term rental business need to be aware of and comply with relevant regulations. This article covers the key things to know about short-term rental rules in Timaru.

Starting a Short-Term Rental Business in Timaru

To legally operate a short-term rental in Timaru, there are several areas where regulations apply:

Zoning: In most zones, resource consent is required for "Travellers' accommodation", which includes short-term rentals. The exception is in the Residential 1 zone, where travellers' accommodation for up to 10 people is permitted without consent. However, parking requirements still need to be met, with at least 3 on-site spaces often required.

Building Compliance: If changing the use of a building to short-term accommodation, the owner must notify the council so that Building Code requirements like fire protection, alarms, and accessibility can be assessed. A Building Warrant of Fitness may be needed depending on the use.

Rates: Operating short-term accommodation can affect the rating type and rates payable on a property.

It's recommended to contact the Timaru District Council planning and building staff to discuss your specific situation and ensure compliance.

Some other important considerations when starting a short-term rental business:

• Income is taxable and needs to be declared, with expenses able to be claimed. Special tax rules apply depending on the property type and use.
• Check if you need to register the property with the council, as some councils require this.
• Make sure you have an appropriate rental agreement covering house rules, payment terms, cancellation policies etc.
• Review your insurance as standard policies may not cover short-term letting. You may need extra cover for the property, contents, and public liability.
• Consider impacts on neighbors and how you will ensure guests are not disruptive.
• Look into any other regulations that may apply around things like health and safety, fire evacuation procedures, and smoke alarms.

Overall, while starting an Airbnb business in Timaru is legal and can provide a great income stream, it's vital to understand and follow all the relevant rules and responsibilities. Consulting with the local council is an important first step.

Short-Term Rental Licensing Requirements in Timaru

To legally operate a short-term rental in Timaru, property owners must obtain the appropriate approvals and licenses from the Timaru District Council. The key requirements are:

1. Resource Consent: In most zones, resource consent is required to use a property for "Travellers' accommodation", which includes STRs. The exception is in the Residential 1 zone, where travellers' accommodation for up to 10 people is permitted without consent, provided parking requirements are met (typically 3 on-site spaces).
2. Building Compliance: If changing a building's use to short-term accommodation, the owner must notify the council so Building Code requirements like fire protection, alarms, and accessibility can be assessed. Depending on the use, a Building Warrant of Fitness may be needed for these systems.
3. Registration: Some councils require STR properties to be registered. While it's unclear if Timaru has a formal registration system, it's recommended to contact the council to confirm any registration obligations.

To obtain resource consent and notify of the change of building use, owners should contact the Timaru District Council planning and building staff. They can visit in person at 2 King George Place, Timaru, call 03 687 7200, or email enquiry@timdc.govt.nz.

Fees for resource consent vary depending on the type of application and processing time required. As of 2021, the initial deposit for non-notified consent is $1,200, with additional fees possible based on processing time. Building Consent fees also vary by project specifics.

Processing times depend on the completeness of the application and council workload. The council has 20 working days to decide on a non-notified resource consent, with potential extensions. Building consents are typically processed within 20 working days as well.

While specific fines for operating an unlicensed STR in Timaru are not listed, many cities impose substantial penalties to discourage illegal STRs. These can range from hundreds to thousands of dollars. Repeat offenders may face escalating consequences.

To avoid fines and ensure compliance, STR operators should work closely with the Timaru District Council to secure all required approvals before beginning operations. Consulting with the council early in the process is recommended.

Required Documents for Timaru Short-Term Rentals

While the Timaru District Council provides guidance on the general requirements and responsibilities for operating short-term rentals, they do not appear to publish a comprehensive list of all the specific documents required. However, based on the information available, some key documents that are likely necessary include:

Resource Consent: For most zones, a approved Resource Consent is required to use a property for short-term accommodation. This shows the property is approved for this use under the District Plan rules. The consent application would need to demonstrate how the activity complies with things like parking requirements.

Building Warrant of Fitness: If the building use is changing to short-term accommodation, a Building Warrant of Fitness may be required to show ongoing compliance with the Building Code for things like fire protection systems, alarms, and accessibility. The building owner must notify the council of the change of use so compliance can be assessed.

Tenancy Agreement / House Rules: While not required to be submitted to the council, having a written rental agreement is important to establish rules and expectations with guests around things like payment terms, cancellation policies, maximum occupancy, parking, pets, noise, and smoking.

Tax Records: Owners need to keep good records of rental income and expenses, as this income is taxable and needs to be declared to Inland Revenue, even for irregular short-term lets.

Insurance Documents: Having appropriate insurance coverage is critical, as standard home and contents policies often don't cover short-term rentals. Owners may need to provide proof of short-term rental or landlord insurance to the council or other entities.

To determine the exact documents required for a specific property, it's best to contact the Timaru District Council directly. Owners can visit in person at 2 King George Place, Timaru, call 03 687 7200, or email enquiry@timdc.govt.nz to discuss their situation with the planning and building staff and ensure they have all the necessary approvals in place.

Timaru Short-Term Rental Taxes

When operating a short-term rental business in Timaru, New Zealand, there are two main types of taxes to be aware of: income tax and Goods and Services Tax (GST). Understanding your obligations for each is critical to staying compliant.

Income Tax

Any income you earn from renting out your property on platforms like Airbnb is considered taxable income in New Zealand. The amount of tax you'll pay depends on your total taxable income and corresponding tax bracket for the financial year.

As of 2023, the income tax rates in New Zealand 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. Remaining income over $180,000 - 39%

You'll need to declare your short-term rental income when filing your annual income tax return. The good news is you can deduct eligible expenses from your rental income to reduce your tax bill.

Goods and Services Tax (GST)

GST is a 15% tax on most goods and services in New Zealand. If your short-term rental income exceeds $60,000 in a 12-month period, you must register for GST. Once registered, you'll need to charge GST on your rental fees and file regular GST returns.

From 1 April 2024, short-term rental platforms like Airbnb will begin deducting GST on your behalf and remitting it to Inland Revenue. If you're GST-registered, you'll need to provide your GST number to the platform to avoid double taxation.

Deductions and Write-Offs

To reduce your taxable income, you can claim deductions for expenses related to your short-term rental business. Some common deductible expenses include:

1. Advertising and platform fees (e.g. Airbnb service fees)
2. Cleaning, laundry, and property maintenance costs
3. Utilities like power, water, and internet
4. Insurance premiums
5. Rates and property management fees
6. Interest on loans used to purchase or improve the rental property (subject to interest deductibility limitations)

It's important to keep accurate records of your income and expenses throughout the year to simplify your tax filing and maximize your deductions.

Overall, while managing taxes for your short-term rental may seem daunting, a basic understanding of your income tax and GST obligations, along with diligent record keeping, will help keep you compliant. When in doubt, it's always best to consult with a qualified tax professional.

New Zealand Wide Short-Term Rental Rules

In addition to local council requirements, short-term rental hosts in Timaru must also comply with several national laws and regulations that apply across New Zealand. Key areas to be aware of include:

Residential Tenancies Act

Short-term rentals are not covered under the Residential Tenancies Act, which governs longer-term tenancies. This means the standard rights and obligations for landlords and tenants don't apply, and hosts need to use short-term rental agreements instead.

Tax Obligations

Income earned from providing short-term accommodation, including through platforms like Airbnb, is considered taxable income. Hosts must declare this income and pay tax on it, even for irregular or one-off rentals.

GST also applies if your annual turnover from short-term rentals exceeds $60,000, or if you provide additional services like meals or cleaning.

Special tax rules apply for calculating claimable expenses, depending on factors like the type of property and its usage. The "mixed-use asset rules" may limit deductions for holiday homes that are sometimes used personally.

Health and Safety

Property owners have obligations under the Building Act and Health and Safety at Work Act to ensure their premises are safe for guests. This includes things like having working smoke alarms, safe gas and electrical installations, pool fencing, and handrails for stairs and decks where required.

Insurance

Standard home and contents insurance policies often don't cover short-term rentals. Hosts should notify their insurer and get appropriate cover for property damage, theft, and public liability for guest injuries.

While platforms like Airbnb provide some damage protection and liability insurance for hosts, this is limited and doesn't replace the need for adequate personal insurance cover.

Consumer Protection

When listing on platforms like Airbnb or Bookabach, hosts must ensure their advertisements and listings are accurate and not misleading. Cancellation policies and other important terms should be clearly disclosed.

The Consumer Guarantees Act also applies, meaning the accommodation provided must be:

1. Fit for its intended purpose
2. Match the description given
3. Provided with reasonable care and skill
4. Provided within a reasonable time (if no timeframe was agreed)

So in summary, while short-term rentals offer a great opportunity for Timaru property owners, it's important to understand and comply with all the relevant national regulations, not just local council rules. Keeping good records and getting professional tax and legal advice is recommended.

Does Timaru Strictly Enforce STR Rules?

Based on the available information and discussions in online forums, it appears that Timaru does not strictly enforce its short-term rental rules compared to other cities in New Zealand. Timaru seems to be relatively Airbnb-friendly, with many hosts operating STRs despite not fully complying with all regulations.

While Timaru does have some rules in place for STRs, such as zoning requirements and building compliance standards, enforcement appears to be lax. The Timaru District Council's approach seems to be more focused on educating property owners about their responsibilities rather than actively cracking down on non-compliant listings.

On Reddit, discussions about STR regulations in New Zealand rarely mention Timaru specifically, suggesting it's not a hotspot for strict enforcement. One Reddit user commented on the general situation in New Zealand: "I've been running an Airbnb for over a year now without any issues. The council doesn't seem too concerned about enforcing the proposed rules strictly. As long as you're being a responsible host and not causing problems for neighbors, you should be fine".

This sentiment appears to apply to Timaru as well. Unlike larger cities like Auckland or Queenstown, which have implemented more stringent regulations and enforcement measures, Timaru seems to take a more relaxed approach to STRs.

Hosts in Timaru appear to operate with relative freedom, often without obtaining all the necessary permits or fully complying with building code requirements. The general consensus among hosts on forums like Bigger Pockets is that as long as STRs don't cause disturbances or complaints from neighbors, they can operate without much interference from local authorities.

However, it's important to note that this relaxed enforcement doesn't mean there are no rules in place. The Timaru District Council still requires STR operators to comply with zoning regulations, ensure building compliance, and consider the impact on rates. But the practical reality seems to be that many hosts operate without strictly adhering to all these requirements.

In conclusion, while Timaru does have regulations for STRs, the city appears to be relatively Airbnb-friendly compared to other New Zealand cities, with less strict enforcement of rules. Many hosts seem to operate STRs in Timaru despite not fully complying with all regulations, taking advantage of the more relaxed approach to enforcement in the city.

How to Start a Short-Term Rental Business in Timaru

Starting a short-term rental business in Timaru requires careful planning and adherence to local regulations. Here's a step-by-step guide to help you get started:

Check Zoning Regulations: Timaru's District Plan defines short-term rentals as "Travellers' accommodation". In most zones, you'll need resource consent. However, in the Residential 1 zone, you can accommodate up to 10 people without consent. Contact the Timaru District Council to confirm your property's zoning and requirements. Even in permitted zones, ensure you comply with parking requirements, typically 3 or more on-site spaces.

Assess Building Compliance: Notify the council about changing your building's use to short-term accommodation. They'll assess Building Code requirements for fire protection, alarms, and accessibility. You may need a Building Warrant of Fitness. Schedule a site visit with council staff to determine compliance needs.

Consider Rate Implications: Operating a short-term rental can affect your property's rating type and the rates you pay. Discuss potential changes with the council's rates department. Factor potential rate increases into your business plan and pricing strategy.

Obtain Necessary Consents and Permits: Apply for resource consent if required. Prepare a detailed application showing how your property meets zoning and building requirements. Consider hiring a planning consultant to help navigate the consent process.

Set Up Your Business Structure: Decide on a business structure (sole trader, partnership, or company) and register for tax purposes with Inland Revenue. Consult with an accountant to determine the most tax-efficient structure for your situation.

Arrange Proper Insurance: Standard home insurance often doesn't cover short-term rentals. Obtain appropriate coverage for property damage, theft, and public liability. Shop around for policies specifically designed for short-term rental properties.

Prepare Your Property: Ensure your property meets safety standards, including working smoke alarms, safe electrical installations, and appropriate access. Consider professional cleaning and maintenance services. Create a welcoming environment with local guidebooks, Wi-Fi instructions, and emergency contact information.

Develop House Rules and Rental Agreement: Create clear house rules and a comprehensive rental agreement covering payment terms, cancellation policies, and guest expectations. Research successful Airbnb listings in Timaru for ideas on effective house rules.

List Your Property: Choose your preferred booking platform(s) and create an attractive listing with high-quality photos and accurate descriptions. Highlight unique features of your property and its proximity to local attractions.

Set Up Financial Systems: Establish a separate bank account for your rental income and expenses. Set up a system for tracking bookings, payments, and tax-deductible expenses. Consider using property management software to streamline operations and financial tracking.

Remember, while Timaru appears to have a relatively relaxed approach to enforcement, it's crucial to operate legally and responsibly. Stay in communication with the Timaru District Council throughout the process to ensure you're meeting all requirements. By following these steps and maintaining high standards, you'll be well-positioned to start and run a successful short-term rental business in Timaru.

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

For inquiries about short-term rental regulations and zoning in Timaru, the primary point of contact is the Timaru District Council. Here's how you can reach them:

Timaru District Council
Phone: +64 3 687 7200
Email: enquiry@timdc.govt.nz
Address: 2 King George Place, Timaru 7910, New Zealand
Website: https://www.timaru.govt.nz

When contacting the council, ask to speak with the planning and building staff about short-term rental regulations. They can provide specific guidance on zoning requirements, resource consents, and building compliance for your property.

For general inquiries or to report issues, you can use the council's online "Fix it" form, available on their website.

While there aren't Timaru-specific online communities for short-term rental hosts, several broader New Zealand and international groups can be valuable resources:

Reddit Communities:

1. r/airbnb_hosts: A growing community for Airbnb hosts to share experiences and advice.
2. r/AirBNBHosts: Another subreddit for Airbnb hosts, though smaller.
3. r/Airbnb: A general subreddit for both hosts and guests, offering diverse perspectives.

Facebook Groups:

1. Airbnb Superhosts: A large group with over 100,000 members sharing tips and experiences.
2. Airbnb Masterminds: Another popular group for hosts to discuss strategies and challenges.

These online communities can provide valuable insights and support, especially for new hosts. While they're not specific to Timaru, many of the discussions about regulations, guest management, and business strategies can be applicable to your situation.

Remember, while online communities can offer helpful advice, always verify information with official sources like the Timaru District Council when it comes to local regulations and zoning requirements.

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

Unfortunately, there are limited direct discussions from Airbnb hosts in Timaru about local regulations on platforms like Reddit and Bigger Pockets. However, we can glean some insights from broader discussions about short-term rentals in New Zealand:

Building Regulations: On a Reddit thread about building homes in New Zealand, users discussed the strict weathertightness regulations that affect all types of buildings, including potential short-term rentals. One user, claiming to be a builder, mentioned that "Because of strict weathertightness regulations in NZ it will be next to impossible to get these kinds of buildings [alternative building styles] through council". This suggests that Timaru hosts may face challenges when trying to convert or build non-traditional structures for short-term rentals.

Council Approvals: Another Reddit user shared their experience with council approvals for non-traditional builds, stating, "Councils are indeed a pain but most of all they are looking for ways to cover their arse. If you can get your architect/engineer/LBP (draughtsman) on board and deliver detailed designs on paper (certified by LBP) then the council will pass it". This implies that while regulations can be strict, working closely with professionals and the council can help navigate the approval process.

Resource Consent: In a discussion about Queenstown, which while not Timaru, provides insight into New Zealand's approach to short-term rentals, a user mentioned, "You need a resource consent for more than a couple of months of AirBnB per year -- and you won't get one". This suggests that even in tourist-heavy areas, there are significant restrictions on short-term rentals, which could potentially apply to Timaru as well.

While these insights aren't specific to Timaru, they provide a general sense of the regulatory environment for short-term rentals in New Zealand. Hosts in Timaru likely face similar challenges with building regulations, council approvals, and resource consents. The overall sentiment seems to be that while regulations can be strict and sometimes frustrating, working closely with local authorities and understanding the rules is crucial for operating a successful short-term rental.

It's important to note that the lack of Timaru-specific discussions could indicate that short-term rental regulations in the city may not be as contentious or strictly enforced as in other New Zealand cities. However, hosts should still ensure they're complying with all local regulations to avoid potential issues.

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.