Accommodation Provider Target Rate (APTR) in Auckland

David-Jack0
Level 2
Auckland, New Zealand

Accommodation Provider Target Rate (APTR) in Auckland

Hello

I am running my 2 airbnb properties as a business.

I understand we are now subject to a new Auclkland tax rates, with an increase of 277%.

The problem is we are now due to collect this amount in our price, and then pay it to the Auckland city council.

This also does not help if we want to avoid paying GST when reselling a property (if you are going over , was it 40K?, income a year) 

I am considering having long term tenants instead.

 

any thoughts?

28 Replies 28

 While I can understand and even support a targeted tourist tax I have two questions.

where is this tax to be applied and how transparent will that be ?.

 

I am also curious to know how such a tax can be applied retrospectively and I’d love to know how legal that is.

 

Last thought : of course it will all be tax deductible as business expense.  ??

 

Hi Graham and Michelle,
Please sign the petition and share:
https://www.change.org/p/say-no-to-auckland-council-bed-tax

Thanks,

Alan

Yes you can go to the Office of the Ombudsmen. However they may expect you to have tried to resolve the matter first with the Council before complaining. In this case I suggest you call the Ombudsmen by phone first. Stress the importance and urgency of the matter.

Also you may find it ends up a long process but stick with it. You should challenge this on as many grounds as possible - (1) retrospective is blatantly unfair (2) calculation is fundamentally flawed - level of commercial activity cannot be measured solely by nights a property is let, number or rooms or units in the activity also needs to be taken into account - how many one room or unit hotels or motels are there? (3) charges are based on capital value - how does that equate to a bed tax? Why isn't it based on number of rooms/units?

Also look up rates on Auckland Council website for nearby motels and provide that info - state the number of units/rooms (obtain from AA  Guide) and also state if there is owner/manager accommodation as well. Compare that to your property. 

Back in 2004 the Office of the Ombudsmen ordered the Queenstown Lakes District Council to cease demands for extra rates & other requirements. That shut them up for 4 years. However Round 2 is currently in progress. So at the end of the day legal action is probably the best option. 

David-Jack0
Level 2
Auckland, New Zealand

Hello. 

There is a very active Facebook group about this matter

Simply search for then group called "AKL APTR action" on facebook

Pauline276
Level 1
Singapore

Once you get hit with the increase its valid for a year apparantly. Since Airbnb agreed they should shoulder some of teh taxt. Anyway its just pocket money and not a business so I am withdrawing my listing not worth the hassle for little return.

Hi Pauline,
Please sign the petition and share:
https://www.change.org/p/say-no-to-auckland-council-bed-tax

Thanks,

Alan

David-Jack0
Level 2
Auckland, New Zealand

There is a Facebook group fighting for the APTR. We created a platform where you can email in one shot media, AKL council, and the Ombudsman. Here is the link https://form.jotform.co/LMIDJ/aptr-email

 

Hi David,
Please sign the petition and share:
https://www.change.org/p/say-no-to-auckland-council-bed-tax

Thanks,

Alan

Helen427
Level 10
Auckland, New Zealand

Update @David-Jack0@Rosanna20@Graham-And-Michelle0@Pauline276@Terri and others

 

https://www.stuff.co.nz/business/property/107651690/apartment-buyer-has-to-pay-7500-rates-bill-becau...

 

Apartment buyer has to pay $7500 rates bill because previous owner allegedly ran an Airbnb

Hi Helen,
Please sign the petition and share:
https://www.change.org/p/say-no-to-auckland-council-bed-tax

Thanks,

Alan

Helen427
Level 10
Auckland, New Zealand

@David-Jack0@Alan409@Brian345@Pauline276@Graham-And-Michelle0and others remember there's a section in CC here to network..

 

All the best

 

https://www.airbnb.com/meetups

Helen427
Level 10
Auckland, New Zealand

@David-Jack0@Alan409@Brian345@Pauline276@Graham-And-Michelle0and @everyone-else 

Will Auckland Council be asking to charge those who have Open Homes for emergencies?

 

Just wondering as they signed an Agreement with Airbnb in 2016??

 

Would they also impose a rating system like this on people who use online platforms like Trade Me?

 

Double standards??

 

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12164445Airbnb to partner with Govt t...

22 Nov, 2018 11:53am

 

Helen427
Level 10
Auckland, New Zealand

@David-Jack0@Alan409@Brian345@Pauline276@Graham-And-Michelle0

 

An academics viewpoint

 

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12203186

Council creating 'resistance culture' among Airbnb hosts: AUT academic
13 Feb, 2019 12:53pm
5 minutes to read
 
An academic warns councils are creating a resistance culture. Photo/Getty Images.

Auckland Council has inadvertently created a "resistance culture" among Auckland Airbnb hosts, AUT marketing lecturer Marian Makkar says.

"The council is seen as being at war against some of its citizens, targeting Airbnb hosts to the point where the public are starting to believe they are cheats," Makkar says.

"They're basically saying all hosts are the same, that all hosts are cheats. That's something that's really fired up the resistance. It makes these guys really angry and upset."

Auckland Airbnb hosts have been reeling from the council's new Accommodation Provider Targeted Rate (APTR), popularly known as the "bed tax," which has seen rates bills double, triple or even quintuple for some hosts.

The council has been struggling to identify who is liable for the targetted rate - or at least at what level, with staff trawling through Airbnb and Bookabach listings. Hosts say they aren't trying to evade the new tax. Rather, confusion reigns over many aspects of it, such as what constitutes a self-contained area.

Ray Pitch, who lets part of his home on Airbnb, says it feels like hosts are being demonised when examples of high-earners are used by the council - when in fact according to Airbnb figures, the 11,300 hosts in Auckland bring in a median $4760 year through the accommodation sharing site.

Makkar says Airbnb has also done its bit to foster rebellion - though in its case, intentionally.

"Airbnb themselves are partly responsible for embedding this resistance culture by continuously asking hosts to speak out to their council," she says.

Pitch confirms this. He says Airbnb also helped organise a meeting of hosts, and has encouraged them to speak out to the media.

But he also syas it's been a bit of a one-way process, with Airbnb keen to help foment discontent, but failing to provide hosts with any explanatory materials as they grapple with the APTR, which is based on a complex matrix of factors.

"We've had to advise them," he says.

After multiple approaches to the council, Pitch was able to get his rates bill reduced from around $16,000 to $5800 - much closer to the $3600 he paid the year before.

Pitch is part of a closed Facebook group of 198 Airbnb hosts.

Makkar says the rebellion will only grow.

"Many hosts have launched or signed petitions, hired lawyers, created private online and offline groups and meet to try and fight this, which is part of a resistance culture that we are not only seeing with Airbnb but with other brands," she says.

She likens the situation to a Gillette campaign that invoked #metoo themes in a controversial bid to provoke discussion, and Nike's ads featuring Colin Kaepernick, the NFL player who drew opprobrium from US president Donald Trump after refusing to stand for the national anthem in protest against racial injustice.

Makkar says many Airbnb's targetted rate personally because they don't see their home as a business but as something that's "private, sacred and extremely meaningful to them. It represents them as people. The hosts feel that because the council wants to control the income by applying a tax," she says.

Part of the problem has come down to poor communication from the councils, the AUT lecturer says.

"If they had done their homework and had things clear from the beginning, hosts wouldn't have resisted so much."

Pitch says it took him months to discover that nights booked through a personal website or word-of-mouth were exempt from the targeted rate.

He says the council was intimidating with its demands for a statutory declaration, and altered its story.

Council financial policy manager Andrew Duncan says the information in the Council's Funding Impact Statement has been consistent throughout, but that it has made tweaks to its messaging to make it easier for Airbnb hosts to understand. An unimpressed pitch has laid a complaint with the Chief Ombudsman, which is being assessed.

Makkar says, action by the council, "might seem financially sound and 'fair', is actually creating socio-cultural problems. Government and councils need to adapt to the changing marketplace and new digital platforms that are sweeping through society and changing traditional consumption and the consumer culture around accommodation, renting, driving and owning things."

What sort of change would she like to see? The academic says she's "100 per cent behind" Airbnb's call for a "true bed tax," or a flat levy of around $5 per night on bookings, which she sees as a more simple and modern solution - although she acknowledged a law change would be required for Auckland Council to go down that route (local government minister Nania Mahuta says she's waiting on a Productivity Commission report into local body funding, not due to be completed until November 30, before considering any change).

Pitch says some hosts see the targetted rate as a tactic to make them throw in the towel and return properties to the long-term rental market or general housing supply. An alternative narrative is that the council has yielded to lobbying by the traditional accommodation industry.

Earlier, Mayor Phil Goff said, "I welcome Airbnb because it provides competition, it provides options and without it we would be struggling to cope with visitors coming to our city. But I have also said to Airbnb that we have to put you on the same level playing field as our traditional providers."

Helen427
Level 10
Auckland, New Zealand

Council out of Control

 

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12201990

Airbnb exec calls for 'true bed tax,' Kaye says council out of control
9 Feb, 2019 5:01am
7 minutes to read
Airbnb Australia-NZ public policy head Brent Thomas says a flat 5 per cent levy on Airbnb per-night charges would be fair.

Airbnb Australia-NZ public policy head Brent Thomas says a flat 5 per cent levy on Airbnb per-night charges would be fair. "The more people earn, the more they pay," he says. Photo / Supplied

 
By: Chris Keall
Business writer, NZ Heraldchris.keall@nzherald.co.nz @ChrisKeall
 

Airbnb hosts have been outraged - often highly confused - by Auckland Council's new Accommodation Provider Targeted Rate (APTR). Popularly known as the "bed tax", it sees commercial rates charged to private homeowners who list through Airbnb or similar services.

Criticism has been three-fold. Airbnb hosts tell the Herald the targeted rate formula, which involves a matrix of factors including the location of home, its value, how many nights are let a year, and arg...

They also say the council's messaging has been confusing, and shifting.

And many say their rates have shot up, making it no longer economic for them to be hosts.

Airbnb's Brent Thomas proposes sweeping aside the targeted rate and replacing it with a flat accommodation levy, which he says would be easy to understand and administer.

If an Airbnb listing or hotel room cost $100 a night, a bed tax of 5 per cent would mean the guest pays an extra $5 dollars, he says, by way of example of how a hypothetical rate could work.

Thomas says the "true bed tax" concept has already been adopted by more than 400 central and local government jurisdictions worldwide, and that it's been used to raise more than $1.5 billion in levies from Airbnb hosts alone.

He describes it as more fair than the targeted rate formula. The more people earn from Airbnb, the more they would pay.Rates bill hiked from $3600 to $16,000

Airbnb host advocate Ray Pitch strongly supports the idea. He says it would be transparent, and he sees guests accepting it if it was itemised on their Airbnb bill.

With the introduction of the targeted rate, midway through last year, Pitch saw his the rates bill on his central Auckland home jump from $3600 to $16,000. He had it reduced to $5800, says it took three rounds of appeals - and that even post-appeal his rates bill is still too high for him to remain an Airbnb host.

Like other Airbnb hosts, Pitch says he did not realise from Auckland Council's initial communication that the targeted rate only applied to so-called online peer-to-peer portals like Airbnb and Bookabach. Bookings made through word of mouth or a personal website were exempt.

That was the case for a lot of Pitch's bookings, which came from parents of children at a neighbouring private boarding school. He adds that when council staff pore over Airbnb listings, they also can't tell if dates are blacked out because, for example, a host has in-laws coming to stay. But maximum bookings have been assumed in targeted rates bills, with the onus on hosts to appeal.

Pitch says the council was forced to send out new communication explaining the exemptions. Council financial policy manager Andrew Duncan says the information on the council's website has been consistent throughout, but that it has made tweaks to its messaging.

"Information relating to properties which are liable for the APTR is set out in Auckland Council's Funding Impact Statement. This hasn't changed. We have made some amendments to our communications to make it easier for property owners to understand how this applies to them," Duncan says.Ombudsman complaint

An unsatisfied Pitch has laid a complaint with the Chief Ombudsman over the targeted rates communication and process, which he thinks intimidated and confused Auckland's 11,300 Airbnb hosts.

A spokesman for the Ombudsman's office said it was being assessed.

Meantime, National's Nikki Kaye has already decided the council's communication was not up to snuff.

"At an administrative level, this is a frickin' hornets nest in that they didn't even define basic terms when they went out to people and rated them," she told the Governance and Administration select committee shortly before Christmas, reacting to a submission from Pitch (a clip of her appearance is on high-rotate in a closed Facebook group for Airbnb hosts; Kaye's greatest hits are from 18.00 here).Law change required

Thomas and Pitch both say they appreciate Auckland Council has been forced into contortions by the Rates Act, which restricts local bodies to collecting revenue associated with land use.

The Herald approached local government minister Nanaia Mahuta, who confirmed "A true bed tax is not possible under the Rating Act."

Her response, in short, is that she'll think about it and that her decision will partly hinge on an inquiry underway.

"Bed taxes are within the scope of the Productivity Commission inquiry into local government funding," she says.

That inquiry includes looking into the cost pressures councils face like infrastructure and services to support visitors.

"The efficacy of a bed tax needs to be considered as part of the council funding system as a whole. It also needs to be considered in the context of other work to relieve the pressure from growing tourism demand like an International Visitor Conservation and Tourism Levy," she says.

"It's still too early to say whether or not a bed tax should be part of future funding tools for councils."

The Government requested the Productivity Commission's investigation in September. A spokeswoman says it is targeting June for a draft, which will be followed by a round of submissions. Its final report is due on November 30.

Auckland Mayor Phil Goff has said any Airbnb hosts who feel they are being overcharged should contact the council. Pitch is angry it took him three rounds of appeals to get his bill reduced, however.

Some see the targeted rate for Airbnb hosts as the result of successful lobbying by hotel and motel owners.

But Pitch says the talk among a closed Facebook group of 198 Airbnb hosts is more that they've been dragged into the housing affordability debate. The working theory is that the council pitched the targeted rates high in a bid to drive hosts out of the online booking game to return properties to the long-term rental market (and Airbnb has copped blame for a rental squeeze in several areas).'Council out of control'

The opposition is already on board with any move to scrap the APTR.

At a Governance and Administration select committee hearing on December 19, National's Nikki Kaye said ratepayers had no heads-up about the targeted rate, which was applied retrospectively.

The Auckland Central MP also said: "The inequitable nature of it means we are equivalent to Venezuela in that some people have had rating bills, on top of their tax bills, that mean they're paying 80 per cent tax."

She added: "I've never seen anything as a Parliamentarian as flawed and inequitable and worrisome about a council out of control."'Blunt tool'

Airbnb exec Thomas says his company will support Auckland council's efforts to implement its targeted rate. Pitch grumbles that Airbnb has done a lot in terms of encouraging hosts to agitate and complain to councillors and the media, but nothing in terms of helping to explain the new tax to hosts, adding, "we've had to advise them.".

But he adds: "We have always been clear that we think there is a better way.

"Rates are blunt tools which don't take into account a person's income or earnings - only the value of their property. It means an asset-rich, cash-poor retiree sharing their empty nest for extra income would be harshly penalised because their family home has appreciated over the years. Rates are also difficult to collect and enforce in an efficient, targeted way."

Airbnb believes a bed tax on all accommodation operators is a fairer and better solution," he says.

"Put simply, with a bed tax, those who earn the most pay the most. Bed taxes are also quick and easy to implement which means less money spent on administration and more money invested in local infrastructure.

"Rather than forcing local councils to rely on regressive rates, New Zealand should be bold and explore bed taxes."

Airbnb says it has not seen any fall-off in hosts because of the targeted rate, but several hosts have told the Herald they have months of forward-bookings to honour before they throw in the towel.