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The Most Egregious LTP Decision!

One decision that has generally slipped under the radar arising from the LTP Deliberations revolved around the move to reject the Staff Recommendation to impose a $200 levy on all Bed & Beakfasts, and houses let through Book-a-Bach etc. (Go to Page p. 47, Para 4.8.)

In the event, the decision was to impose the levy and create a 'commercial' classification of all B & B's with 4 bedrooms or more, but to remove rented houses from the equation. (Go to Page 17, Para 4.8 & 4.9)

The 'commercial' classification means that qualifying B & B's become liable for the Economic Development levy - in the case one 4 B/R unit, this amounts to some $600 - others will be more or less depending on valuation.

One has to understand that the motivation for the imposition on B & B's has historical roots. Leach once ran a motel, and has always sounded off about rented houses and B & B's having the advantage of not having to comply with a whole range of health and safety requirements, amongst others. I recall him vowing to balance the scales when he got into office.

No-one took much notice when the proposal was introduced into this years draft LTP - excepting the house renters who organised mightily through their agent organisations to make loud and detailed submissions - the greatest number on any aspect of the Plan. The Bed & Breakfast owners were not nearly as well organised, and apart from a few individuals, failed to take a concerted case opposing the imposition.

The net result was that our brave councillors responded to the "squeaking wheel" by eliminating the house rental levy ("for further consideration!"), but went ahead with the imposition on the B & B's. This has resulted in a considerable number seriously considering either exiting the industry, or reducing their room numbers to three. This is hardly what was intended, but is what happens when you react as this Council seems want to do.

The Bed & Breakfast Association New Zealand is now taking a real interest - I understand that it is a voluntary organisation with limited resources, but it is motivated to seek a legal opinion on the actions of the Council in imposing this levy. This may or may not have legs, but it will nevertheless be an interesting test should it go ahead as I hope it does!

The 'commercial' classification was a really nasty twist in the tail in what may otherwise have been a perfectly 'fair' $200 levy decision, had it been imposed alongside all the renters. The Staff Recommendation made the case extremely well, but it was ignored. After all, renters and B & B clients use exactly the same Council resources.  




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