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Airbnb changes: but wait there’s more …

08 Jul 2019

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By Sarah Ogilvie, Associate, Aspiring Law

The Queenstown Lakes District Council announced changes to short-term visitor accommodation rules, covering the likes of Airbnb, for certain zones earlier this year – but that didn’t account for all properties.

Further areas are due to be looked at later this year, as part of “Stage 3” of the District Plan review.

In our last article, we looked at the outcome of the Council’s “Stage 2” review of its District Plan in relation to short-term visitor accommodation rules, which included: residential zones (low and medium density), high-density residential and business mixed-use zones and rural zones.

The “Stage 3” review will encompass:

  • Township zones
  • Gorge Road high-density residential zone
  • Business mixed-use zones
  • Industrial zones
  • Rural visitor zones
  • Ballantyne Road mixed-use zone
  • Three Parks

A common question I’m fielding from property owners who rent out their properties on platforms like Airbnb and Bookabach in the zones that are yet to be reviewed is: “What rules should I be following?” The answer: The “old” short-term visitor accommodation rules will apply until the new ones are formally approved under the Council’s “Stage 3” District Plan review.

From what I’m seeing, the staggered reviews have added an extra layer of confusion for property owners trying to navigate what, if any, consent they need to be compliant.

If you own a property in one of the “Stage 3” zones, it’s really worth seeking advice as to whether it could be to your advantage to obtain a resource consent under the “old” rules, while you still can – especially if you think it’s likely the new regime is going to be less flexible than the current one. (Remember: as long as the scale and nature of your short-term visitor accommodation operation stays the same, and notwithstanding any other developments, a resource consent granted before any rule changes will endure.)

Silver linings

What started for many as a way to earn a few extra bucks every now and then letting out a spare room is now big business. Recent research estimates Kiwis pocketed more than $500m from the likes of Airbnb last year. Part of the reality of that has been councils dealing with the regulatory side and the pressures such sudden growth brings. Owners are also having to familiarise themselves with the compliance and business aspects, including the potential ramifications of a “bed tax”, which looks likely to be introduced in the not-too-distant future.

While that takes effort and money, savvy operators know it’s worth committing the time to research and seek timely advice. Sorting out and shoring up resource consent might seem like an expensive pain in the proverbial, but for many it will be an investment.

Many short-term visitor accommodation operators don’t realise that the resource consents run with the land, meaning that, if you obtain one for your property, come sale time, that benefit will pass on to the buyers. So, bear in mind, if you’re selling your property, and you’ve secured a resource consent, that likely has value and should probably be reflected in the sale price.

From a prospective buyer’s perspective, it’s worth querying whether a property is consented as part of pre-sale due diligence. It might even pay, where there isn’t a consent, requesting the vendor secures one before the sale’s finalised.

A final reminder, especially as we see more and more people adding to their property portfolio specifically targeting the short-term visitor market: not all areas have the same rules. For example, if you already have a property in the Central Otago District Council area, and then go and buy another in the Queenstown Lakes District Council patch, they might not be treated the same under the respective District Plan rules.

If you’re already involved in providing accommodation on Airbnb or similar platforms, or are considering it, and you’re not sure of the implications of District Plan rules (or the other must-know regulations and considerations, for that matter), a little bit of legal advice will likely go a long way.

Given the amount of change at play, the variables and also the fact that there are pretty drastic consequences for getting it wrong, I recommend you book a time with a property lawyer, who specialises in short-term visitor accommodation, bank, insurer and accountant to work through your specific situation and ensure you’re taking the correct steps and precautions at the right time.

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