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Imposition on Bach Rentals

The Council has at long last taken steps to deal with the situation surrounding what amounts to commercial renting of holiday houses through Trade-me, Book-a-Bach etc. - 1,400 of them according to the presser. Those in this category are to be hit with a $200 flat imposition on their rates.

The second category of accommodation to be re-classified comprises those where with four bed-rooms or more are for hire at any one time - they will be reclassified as 'Industrial and Commercial' to pull them into the same 'pan-charge' category as moteliers, thus creating a a level 'playing-field.'

The move is long overdue as the tourism attraction of the District has developed, and bach owners in particular have sought to moneterise their asset through the use of use of burgeoning rental brokers. Moteliers and commercial bed and breakfast operators have long resented the unfair advanage enjoyed by these 'amateurs' who pay normal domestic rates for these properties, while offering accommodation in numbers, and often at tarriffs never envisaged when the rating system was established.

There appears no doubt that some operators will drop out, indignant at the Council nobbling them in this manner, but that will simply result in a loss of business by the brokers. Note that those not advertised will remain untouched by this arrangement, and the effect is in any case likely to be minimal, and temporary. 

Leach (a former motelier, note!) made it clear that he would bring about a 'level playing-field' when he was elected - previous councils tried to deal with the situation, but could never agree on a fair categorisation of the various arrangements. The current proposal appears to cover all the permutations, and should be adopted in the Annual Plan without difficulty, but undoubtedly with squeals of anguish from the various quarters that will be effected. 

The manner in which the presser draws attention to the connection with economic development is a total 'red-herring' of course, but provides a wonderful opportunity for promotion of the stuttering efforts in that direction - ie tracks, cycleways and events, most of which has constituted bombast and hot-air to date, and run in an 'amateur-hour' fashion.

The rationale for the fixed charge, and commercial categorisation is fully justified alone on the fairness and equity basis that existed long before Leach's legacy projects came into the picture. But if that is what it takes to get it off the ground, so be it!




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Reader Comments (1)

I'm one of those that will attract a $200 charge as far as I can see. The money I earn from renting out our small studio (not a whole house, mind) to predominantly overseas guests doesnt cover our rates bill, but every bit helps as the peninsula is an expensive place to live (there is a price for living in paradise!). We also really enjoy meeting people from around the world. I should say right away I am not opposed to the principle, but there are issues that cause me some concern.
The first is the statement that the money will be used to help fund economic development. I am opposed to Council's current involvement in economic development at present in general terms. These economic development projects driven by the Council are, in the main, do not seem to adequately have their costs controlled, are poorly planned and executed, and are untested as to their economic benefit to the community. I do not trust the current mob to allocate the $240k they will get from this "rates grab" in a responsible manner - just look at grant allocations such as the Leadfoot grant to support my assertion. Council's need to stick to their basic core functions and get them right - opportunities for business and economic development will sort themselves out through the private sector and possibly at a national level (e.g funds provided for the rail trail).
Secondly, you're spot on when you say that Economic Development is a red herring for this money. Such a tax should be going to addressing the impacts from more tourists to the council infrastructure - that surely is the real issue here.
Coucil in the future will have to be a bit careful on this one - uncontrolled rises to this amount in the future may backfire. If the charge is too high, people may not bother making baches available, or prefer to rent to a long termer. Visitors (especially larger family groups) may stop coming altogether because of a lack of value accommodation, which may hurt the very businesses this tax is trying to placate. Motelliers too have to start thinking smarter about their businesses - Social media has made it one of the most publicly scrutenised businesses you can be in these days.
Finally a point of principle - this tax will be an automatic 10% rates increase for me, and I'm not connected to Council sewerage or water. It seems ironic given the trumpeting out of Council regarding the zero or low rates increases in the last few years.

March 12, 2015 | Unregistered CommenterSailing Away

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