29 May 2018

Goff's 'build-it budget': Rates could rise for online visitor rentals

7:23 am on 29 May 2018

People who rent out visitor accommodation could pay thousands of dollars in extra rates under a new proposal by Auckland Council.

Phil Goff is calling it the 'build-it budget'.

Phil Goff is calling it the 'build-it budget'. Photo: RNZ/Todd Niall

The council will vote on the budget measure on Thursday. Under it, a home or apartment rented out for more than six months a year will be treated as a business and hit with two layers of new charges, adding up to $7200 in rates.

Mayor Phil Goff has dubbed it part of a "build-it budget".

"For too long Auckland suffered from underinvestment, with the critical issues being left in the too hard basket," Mr Goff said.

A range of new taxes and charges will pump up council capital spending to a record $26 billion over the next decade, as funding to tackle transport and environmental problems accelerates.

The capital spend is up from the $19 billion proposed three years ago, for the following decade.

Details of rates for online accommodation providers is one of the new features in a budget which had been out for consultation for months.

Dwellings rented to tourists would move in four steps from paying residential to full business rates depending on how long they were rented, as well as a new targeted rate already applied to traditional visitor accommodation.

That targeted rate is being challenged in court by the hotel and motel industry, and a frustrated Mr Goff said while he was confident the council would win, the $14 million at stake each year was significant - equivalent to a 1 percent rates rise.

Other ideas worked on since the public considered the long term plan include a $40 million Climate Change Response Fund, and an extra $90m to manage coastal assets.

A contestable fund to build sport and recreation facilities gets an additional $100 million.

Major features have been well-flagged, such as the 11.5 cents-a-litre regional fuel tax, and targeted rates to generate $452 million to improve water quality. There is also the need to reap $311m to tackle Kauri dieback and other environmental issues.

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Photo: RNZ / Eva Corlett

General rates will rise overall by 2.5 percent in the next two years, and then 3.5 percent beyond that. Residential rates will rise by an additional 0.5 percent, as a long-standing policy of easing the burden on businesses resumes after a one-year break.

A new idea is to launch in west Auckland, a smaller version of the council's Southern Initiative, which pilots community-based social programmes such as trade training for Māori and Pasifika and community support schemes. It will be allocated $500,000 a year.

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