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

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

Whitianga is a popular holiday destination on the Coromandel Peninsula in New Zealand. With its beautiful beaches and laid-back vibe, many property owners are interested in renting out their homes to short-term guests on platforms like Airbnb and VRBO. However, it's important to understand the local regulations before starting a short-term rental business.

Starting a Short-Term Rental Business in Whitianga

When starting a short-term rental in Whitianga, you need to be aware of a few key regulations:

• Check with the Thames-Coromandel District Council on any specific rules for short-term rentals in Whitianga. Some councils require properties to be registered.
• When a property is used as a holiday rental, it is not covered by the Residential Tenancies Act. This means standard long-term rental agreements do not apply. You will need a written short-term rental agreement outlining terms and conditions.
• Income earned from short-term rentals, even if irregular, is taxable. You must declare this income and can claim allowable expenses. Special tax rules apply depending on the type of property.
• If your annual turnover exceeds $60,000, you may need to register for and charge GST. This is also the case if you provide additional guest services beyond just accommodation.

One Whitianga property owner shared their experience on the New Zealand subreddit:

"The small town I live in literally kicks you out over Christmas if you're renting because they make $1500/week over the Christmas break using AirBnb. How tf is this legal? And why are we just letting this happen?"

They explained that securing a long-term rental is difficult because owners prefer lucrative short-term renting over the holidays. This forces some renters to find alternative accommodation during peak periods.

So in summary, while short-term renting can be profitable in a holiday hotspot like Whitianga, it's crucial to understand and comply with all the relevant regulations. Consult with the local council and tax authorities to ensure you are operating legally. Be upfront with guests about any limitations or requirements. With proper planning, short-term renting can be a viable business in Whitianga.

Short-Term Rental Licensing Requirement in Whitianga

Currently, there are no specific licensing requirements for short-term rentals like Airbnb and VRBO in Whitianga or the greater Thames-Coromandel District. The Thames-Coromandel District Council (TCDC) does not have a formal registration or permit process in place for holiday homes and baches being used as short-term visitor accommodation.

However, there are a few key things short-term rental operators in Whitianga should be aware of:

1. If a property is used for short-term visitor accommodation for more than 50 days per year, it may require a resource consent from the TCDC under the District Plan rules. The specific requirements depend on the property's zoning.
2. Short-term rentals are considered a commercial use of residential property. This means the property will likely be rated as "mixed use" by the TCDC, resulting in a 25-35% increase in rates compared to a standard residential property.
3. Income earned from short-term rentals is taxable and must be declared to the IRD. If your annual turnover exceeds $60,000, you may need to register for and charge GST.
4. There are currently no specific fines or penalties in place in Whitianga for operating a short-term rental without a permit, as the TCDC does not have a formal licensing system. However, operating without a required resource consent could result in enforcement action.

While the TCDC does not directly regulate short-term rentals at this time, operators should stay informed of any potential changes to rules and requirements. It's recommended to contact the TCDC for guidance on whether a resource consent is needed for your specific property and situation.

As short-term rentals continue to grow in popularity in tourist destinations like Whitianga, it's possible the TCDC may introduce more formal regulations and a licensing process in the future to help manage the local impacts. But for now, the requirements remain relatively minimal compared to some other jurisdictions in New Zealand and abroad.

Required Documents for Whitianga Short-Term Rentals

While the Thames-Coromandel District Council (TCDC) does not currently have a formal registration or licensing process for short-term rentals in Whitianga, there are still some important documents and registrations to be aware of:

1. Resource Consent: If a property is used for short-term visitor accommodation for more than 50 days per year, it may require a resource consent from the TCDC under the District Plan rules. The specific requirements depend on the property's zoning. Contact the TCDC to determine if your property needs a resource consent based on its intended use.
2. IRD Number: As income from short-term rentals is taxable, you will need an IRD number to declare this income to Inland Revenue. If you don't already have an IRD number, you can apply for one online at the Inland Revenue website.
3. GST Registration: If your annual turnover from all taxable activities, including short-term rental income, exceeds NZ$60,000, you must register for Goods and Services Tax (GST). You can register for GST online through your myIR account on the Inland Revenue website.
4. Rates Declaration: Short-term rental properties are considered mixed-use and may be subject to higher council rates. You must inform the TCDC if you are using your property for short-term accommodation so they can correctly assess your rates. This is done through a rates declaration form available from the council.
5. Short-Term Rental Agreement: While not a legal requirement, it's highly recommended to have a written rental agreement outlining the terms and conditions of the stay. This should cover things like check-in/out times, house rules, cancellation policy, etc. Some platforms like Airbnb provide a template that can be customized.
6. Insurance Certificate: Check with your insurance provider to ensure your property is adequately covered for short-term renting. You may need to provide proof of insurance to some booking platforms. Specialized short-term rental insurance is available.

While these are the key documents to consider, requirements can vary depending on your specific situation and may change over time. It's always best to check with the TCDC directly for the most up-to-date information on short-term rental requirements in Whitianga. Failing to obtain necessary consents or make proper declarations could result in penalties.

As the short-term rental market continues to grow and evolve in Whitianga and the Coromandel, it's possible more formal registration and licensing processes may be introduced in the future. But for now, operators should focus on ensuring they have the appropriate resource consents, tax registrations, and insurance in place.

Whitianga Short-Term Rental Taxes

When operating a short-term rental in Whitianga, it's important to understand the tax obligations that come with this income. The two main taxes that apply are income tax and Goods and Services Tax (GST).

Income Tax

All income earned from short-term rentals is subject to income tax in New Zealand. The amount of tax owed will depend on your total taxable income for the year. The current income tax rates for individuals are:

1. 10.5% on income up to $14,000
2. 17.5% on income from $14,001 to $48,000
3. 30% on income from $48,001 to $70,000
4. 33% on income from $70,001 to $180,000
5. 39% on income over $180,000

However, you can deduct expenses related to earning the rental income, such as:

1. Rates and insurance
2. Interest on any mortgage borrowing
3. Repairs and maintenance costs
4. Cleaning, advertising, and property management fees
5. Depreciation on chattels like furniture and appliances

If the property is used for both personal and rental purposes, expenses must be apportioned accordingly. Special rules apply if the property is vacant for more than 62 days in the year.

Goods and Services Tax (GST)

Unlike long-term residential rentals, short-term accommodation is subject to GST. If your total annual turnover from the rental activity exceeds $60,000, you must register for GST. The current GST rate is 15%.

If registered for GST, you must charge GST on the rental price and can claim back the GST on any related expenses. However, this also means that if you sell the property, GST will apply to the sale price which could be a significant amount if the property has appreciated in value.

Short-Stay Standard-Cost

For those renting out their main home or rooms within it for short stays, there is a nightly standard-cost rate set by the IRD. For the 2023-24 tax year, this is $61 per night for homeowners and $55 for non-homeowners. Income up to this nightly rate is exempt from income tax.

If you charge more than the standard-cost rate, you only pay income tax on the amount above the exempt level. No expenses can be deducted if using this method.

To use the standard-cost method, the following criteria must be met:

1. It is your main home being rented
2. Guests stay no more than 4 consecutive weeks
3. Total rental nights are 100 or less per year
4. It is not part of a GST taxable activity

Possible Deductions

In addition to the expense deductions mentioned earlier, there are a few other possible write-offs:

1. Accounting and tax preparation fees
2. Home office expenses if managing the rental from home
3. Vehicle expenses for travel related to the rental
4. Fees or commission charged by booking platforms like Airbnb

It's important to keep accurate records of all income and expenses related to the short-term rental activity. Consult with a qualified tax professional to ensure you are meeting all tax obligations and claiming deductions correctly.

While short-term rentals can provide a good income stream, the tax implications are more complex than traditional long-term rentals. Understanding and complying with income tax and GST requirements is crucial for Whitianga property owners venturing into the short-term accommodation market.

New Zealand Wide Short-Term Rental Rules

In addition to any specific requirements in Whitianga and the Thames-Coromandel District, there are several national laws and regulations that apply to short-term rentals across New Zealand:

Goods and Services Tax (GST) Changes from April 1, 2024

A significant change is coming for GST on short-term rentals booked through online marketplaces like Airbnb and Bachcare. From April 1, 2024, these marketplace operators will be required to collect and return GST at 15% on accommodation they facilitate, even if the host earns under the $60,000 GST registration threshold.

For hosts who aren't GST-registered, the 15% GST will be added to the rental price. The marketplace operator will pass on an 8.5% flat-rate credit to the host to cover GST that would have been claimable on expenses. Hosts can't claim GST on costs under this model.

GST-registered hosts will receive the rental income net of GST and return this as a zero-rated supply. They can continue claiming GST on expenses as usual. Hosts must advise the marketplace of their GST status to avoid incorrectly receiving the flat-rate credit.

Income Tax on Short-Term Rental Income

All income from short-term rentals, including irregular or one-off rentals, is taxable and must be declared. Expenses can be deducted, but specific rules apply depending on the type of property (e.g. main home, holiday home, investment property).

If a property is sometimes used personally and sometimes rented out, it may be subject to the "mixed-use asset" rules which can limit deductions based on the proportion of personal vs rental use.

Local Council Registration Requirements

Some councils in New Zealand require short-term rentals to be registered. While Whitianga doesn't currently have a registration system, it's important for hosts to check if any new requirements are introduced by the Thames-Coromandel District Council.

Building and Healthy Homes Standards

Short-term rentals may require building consent for any renovations or change of use to comply with the Building Code. While the Healthy Homes Standards for heating, insulation, ventilation, etc. don't legally apply to short-term rentals yet, it's recommended to meet these as a guide.

Health and Safety Obligations

Under the Health and Safety at Work Act 2015, short-term rental hosts have responsibilities to ensure guest safety, including identifying hazards, maintaining smoke alarms, providing evacuation instructions, etc.

Short-Term Rental Agreements

As short-term holiday rentals aren't covered by the Residential Tenancies Act, hosts need a written rental agreement covering rules, terms, and conditions. Some platforms like Airbnb provide a template that can be customized.

Other Considerations

Hosts should also be aware of their obligations under the Privacy Act 2020 to protect guest data, ensure their property is accurately represented to avoid breaching the Fair Trading Act 1986, and check their insurance coverage is suitable for short-term renting.

While not all of these national rules involve significant compliance steps for hosts, it's crucial to be aware of the tax implications, especially the upcoming GST changes in April 2024. With the short-term rental market continuing to evolve, Whitianga hosts should stay informed of any new national or local regulations that may impact their operations.

Does Whitianga Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit, it appears that Whitianga and the Thames-Coromandel District Council (TCDC) do not currently have a strong enforcement regime for short-term rental regulations. While some rules exist, such as requiring resource consent for properties rented out more than 50 days per year, active monitoring and penalties seem to be limited.

One Reddit user shared their experience of short-term renting in a tourist town, likely referring to somewhere like Whitianga:

"I had friends who owned their house in a resort town and would go away or stay in a campground over the holiday period as they could pay off a substantial amount of their mortgage with 2 months of renting out their house. It's a pretty common occurrence..."

This suggests that operating short-term rentals, even for extended periods, is relatively commonplace and unchallenged in popular destinations like Whitianga. The TCDC does not appear to be proactively identifying non-compliant listings or imposing fines.

Compared to cities internationally that have taken a harder line on short-term rentals, like Barcelona which has banned private room rentals, Whitianga seems to be more hands-off and Airbnb-friendly at this stage. New Zealand more broadly has been criticized for taking a "neoliberal" approach to short-term rental compliance that favors platforms like Airbnb over local communities.

So in summary, while Whitianga has some rules on the books for short-term rentals, active enforcement appears to be minimal based on anecdotal reports. Many hosts are likely operating without fulfilling requirements like resource consents, but are not facing strict monitoring or penalties from the TCDC. The current environment in Whitianga seems to be largely permissive of short-term rentals, especially compared to the stricter stances taken by some other tourist hotspots globally.

However, as short-term rentals continue to grow and housing affordability concerns mount, it's possible the TCDC may look to tighten enforcement in the future. For now though, Whitianga remains a relatively easy place to be an Airbnb host, with rules that are often sidestepped without significant consequence.

How to Start a Short-Term Rental Business in Whitianga

Starting a short-term rental business in Whitianga can be a lucrative venture, but it requires careful planning and execution. Here are the key steps to get started:

Research local regulations and obtain necessary permits:

• Check with the Thames-Coromandel District Council on any specific rules, zoning restrictions, or permits required for short-term rentals in Whitianga.
• Ensure your property complies with building and safety codes. You may need a certificate of occupancy.
• Register for an IRD number and GST if your annual turnover will exceed $60,000.

Prepare your property for guests:

• Ensure your property is clean, well-maintained, and properly furnished for short-term rentals. Consider hiring a professional cleaning service.
• Provide essential amenities like linens, towels, kitchenware, and toiletries.
• Install safety features like smoke detectors, fire extinguishers, and first-aid kits.
• Create a welcome book with house rules, local recommendations, and emergency contact info.

Set up a business entity and get insured:

• Consider forming an LLC or company to protect your personal assets and gain tax benefits. Consult with an attorney and accountant.
• Obtain proper insurance coverage for short-term renting, including property, liability, and contents insurance. Speak with your insurance provider about the right policy.

Create an attractive listing on booking platforms:

• List your property on popular sites like Airbnb, Vrbo, and Bachcare. Use professional photos and write compelling descriptions that highlight your property's unique features.
• Be transparent about amenities, house rules, and any potential drawbacks.
• Research comparable listings in Whitianga to determine a competitive nightly rate.

Automate and streamline your operations:

• Use vacation rental software to manage bookings, guest communication, cleaning, and dynamic pricing. This will save time and help you run your business more efficiently.
• Hire a local property manager if you need on-the-ground support for cleaning, maintenance, and guest issues.
• Keep detailed records of income and expenses for tax purposes. Open a separate bank account for your rental business.

Provide excellent guest service:

1. Respond promptly to inquiries and maintain open communication with guests before, during and after their stay.
2. Offer self check-in for convenience using a lockbox or keypad.
3. Go above and beyond with small touches like local treats, handwritten welcome notes, and personalized recommendations.
4. Encourage guests to leave reviews and maintain a high rating to attract more bookings.

Some additional tips for success:

• Start small and test the market before investing in multiple properties.
• Be realistic about costs, revenue potential, and the time commitment required.
• Stay up-to-date on industry trends and continuously improve your listing and guest experience.
• Network with other short-term rental operators in Whitianga for support and advice.

With careful planning, attention to detail, and a commitment to providing outstanding guest experiences, you can build a thriving short-term rental business in the popular holiday destination of Whitianga.

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

If you have questions about short-term rental regulations, permits, or zoning in Whitianga, here are the key contacts and resources:

Thames-Coromandel District Council (TCDC)

The TCDC is the local authority responsible for planning, zoning, and bylaws in Whitianga. Contact them for information on resource consents, building codes, rates, and any specific short-term rental rules.

• Phone: 07 868 0200
• Email: customer.services@tcdc.govt.nz
• Address: 515 MacKay Street, Thames 3500
• Website: tcdc.govt.nz

You can also submit a request for service online for inquiries related to rates, building, bylaws, noise control and more: tcdc.govt.nz/Contact-Us

Hosts on the Coast

Hosts on the Coast is a local holiday home management company in Whitianga. They have experience navigating council regulations and can provide advice to property owners looking to start short-term renting.

• Freephone: 0800 292 942
• Local: 07 866 0292
• International: +64 7 866 0292
• Email: info@hostsonthecoast.co.nz
• Website: hostsonthecoast.co.nz

Short-Term Accommodation Association of New Zealand (STAANZ)

STAANZ is an industry group representing short-term rental owners and managers across New Zealand. They provide resources, advocacy, and a forum to connect with other hosts.

• Website: staanz.org.nz
• Facebook Group: facebook.com/groups/STAANZ

New Zealand Land Professionals Facebook Group

This is an active Facebook community for property investors and managers in New Zealand to discuss topics like regulations, finance, and marketing. While not Whitianga-specific, it's a useful place to connect with experienced hosts.

Facebook Group: facebook.com/groups/NZLandProfessionals

Whitianga Community Facebook Group

Joining local community groups on Facebook can be a good way to stay informed about any issues or potential rule changes impacting short-term rentals in Whitianga. Members often discuss tourism, development, and housing matters.

Facebook Group: facebook.com/groups/whitiangacommunity

By engaging with the TCDC, local property managers, and online host communities, you can get the most up-to-date and relevant information on short-term rental regulations in Whitianga. It's important to build relationships with the council and other hosts to stay informed and ensure compliance.

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

While there are limited discussions specifically about short-term rental regulations in Whitianga, some insights can be gleaned from hosts' experiences shared on Reddit and Bigger Pockets forums:

Lack of Strict Enforcement

• One Reddit user shared an anecdote suggesting that operating short-term rentals in tourist towns, even for extended periods, is relatively commonplace and unchallenged:
• "I had friends who owned their house in a resort town and would go away or stay in a campground over the holiday period as they could pay off a substantial amount of their mortgage with 2 months of renting out their house. It's a pretty common occurrence..."
• This implies that some STR hosts in destinations like Whitianga may be operating without fulfilling all regulatory requirements, but are not facing active enforcement or penalties from local authorities.

Impact on Housing Affordability

1. In a thread discussing housing challenges in New Zealand, a commenter pointed out the role of short-term rentals in exacerbating affordability issues in tourist hotspots:
2. "Lack of regulation around AIR BNB has resulted in the housing crisis getting worse and tourism spots becoming completely unaffordable for workers - making the issue worse. Hell a few years ago there were articles about how MOE was struggling to get teachers because rent in Queenstown was $700 for a one bedroom studio apartment"
3. While not specific to Whitianga, this suggests that some residents are concerned about the impact of growing short-term rentals on housing supply and costs in holiday destinations. STR hosts may face increasing pressure to ensure their operations are not negatively affecting local communities.

Navigating Tenant Displacement

1. Another Reddit comment highlighted the practice of some landlords in tourist towns requiring tenants to vacate during peak holiday periods so the property can be rented out short-term:
2. "The small town I live in literally kicks you out over Christmas if you're renting because they make $1500/week over the Christmas break using AirBnb. How tf is this legal? And why are we just letting this happen?"
3. This indicates that some STR hosts in places like Whitianga may be prioritizing high-yield short-term renting over providing stable housing for long-term tenants. Such practices could attract criticism and calls for tighter regulation.

Overall, while direct discussions about Whitianga's STR regulations are limited, these insights from Reddit and Bigger Pockets suggest that hosts in tourist destinations are navigating a changing regulatory landscape. Some may be operating without strict compliance, while others are concerned about the impact of STRs on housing affordability and community wellbeing. As rules evolve, hosts will need to stay informed and adapt their business practices accordingly.

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.