Bed tax details revealed

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A 5% visitor levy would raise $22.5 million a year for easing the burden of infrastructure on Queenstown Lakes district ratepayers, the council says.

At a media briefing on the proposed levy this morning, Mayor Jim Boult said the council would have needed to impose an 8.3% levy to cover the estimated costs of providing tourism-related infrastructure.

After consultation with the accommodation sector, the council had chosen the lower level, but the levy would still fund more than one-third of the estimated $374m in visitor-related capital and operational costs in the current 10-year plan.

For a $250 a night hotel room, that equated to $12.50, or $6.25 if shared by two people, Mr Boult said.

”Many people spend that on one drink at a bar.”

The council announced on March 7 it would hold a non-binding referendum for residents and ratepayers on the levy. Voting papers will be sent to households between May 14 and 19.

Assuming the levy passes through the legislative process, it will be introduced some time after July 1, 2021.
Mr Boult defended the council’s lack of analysis on the impact of a levy on visitor numbers.

”Six bucks – is that going to stop you coming here?

”It’s been introduced in umpteen places around the world, and it’s been proven to have absolutely no effect.”
Since announcing the referendum, the council has been refining the proposal with Government officials and independent tax advisers.

Council regulatory and finance general manager Stewart Burns said revenue from the levy would reduce the council’s projected debt by 39%, lowering interest costs, and give the council scope to reduce the rates that accommodation providers paid compared to other ratepayer sectors.

Mr Boult said the Government had not indicated the level of support it wanted to see in the referendum, but he wanted ”very strong” support.

It was important for people to ”stand up” and make the effort to vote.

He would prefer to see 55% support from a 90% voter response, than 80% support from a 50% response, he said.