Almost 800 Queenstown Lakes District property owners offering holiday home accommodation are about to get the hard word from their district council and could face significant rates rises.
Owners advertising short-term rental accommodation online, but paying residential rates on their properties, have been pinged in an audit by the Queenstown Lakes District Council.
It is sending letters to 792 property owners reminding them they need to register their properties as visitor accommodation, apply for resource consent, or stop advertising for short-term rentals.
Chief financial officer Stewart Burns said this also applied to tenants sub-letting rooms in a house to visitors without the landlord's knowledge.
"We're trying to think of reasons why people have not registered [their properties] and that's a possibility."
Home owners in the Queenstown Lakes area can do one holiday let per year of up to 28 days without it affecting their rates.
But properties reclassified as visitor accommodation for doing multiple lets faced paying about 25 per cent more in rates from July 1.
Stand alone homes rented out as visitor accommodation for more than 90 nights a year also require resource consent, as do multi-unit homes doing any holiday rentals.
Registered holiday homes and homestays had to keep letting records, meet certain fire safety standards, provide on-site car parking, and ensure there were no more than two adults per bedroom.
A two year amnesty to encourage property owners to register their properties appropriately on the rates database had seen total visitor accommodation registrations rise to between 700 and 800, Burns said.
A conviction for failing to comply with the rules under the Resource Management Act carried a maximum penalty of a $300,000 fine and two years imprisonment.
No one had been prosecuted to date, Burns said, because the council preferred to educate owners instead.
Some had tried to evade the audit by not including a physical address in their advertisements but the council used its mapping technology to identify them.
"There's still a considerable amount that are not complying at this stage," he said.
Airbnb's website lists more than 1000 rentals for Queenstown, Wanaka, Arrowtown and Lake Hayes, and the online service has been blamed for a lack of affordable rental housing for workers.
Commercial accommodation providers have also complained that some Airbnb operators benefited from tourism promotions they did not help pay for through rates.
Burns said the crack down was not a revenue gathering exercise as the council had already set its budget, but it would help allot rates more fairly.
"If these people have to pay more then that means everybody else pays a little less.
"There's a definite equity issue there, and we totally support that."
The council also needed information on visitor accommodation rentals because of its impact on the long term rental market and problems with things such as noise, said Burns.
"In some areas we're getting issues around a quiet residential neighbourhood having a couple of houses used for short term accommodation, and they're not always keeping the same hours as the locals."
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