A local who claims Airbnb’s destroying Queenstown’s residential rental market is delighted all Airbnb bookings will attract GST from this coming Monday, April 1.
‘‘This is a great first step,’’ Queenstown hotelier Mark Rose says.
All Airbnb bookings will be subject to GST, regardless of whether the property owner’s GST-registered or not.
‘‘The government needs to collect revenue from these overseas companies, and this is the way to go about doing it,’’ Rose says.
‘‘There are a bunch of laws out there that need to be complied with by anyone in Airbnb, as it is, but as we’re aware, a number of people don’t comply with paying the proper rates and they use their Airbnb for more than the stipulated time every year.’’
Rose manages The Rees Hotel but stresses he doesn’t see Airbnb as a business competitor.
‘‘It’s not me as a hotelier who’s speaking about this, it’s me as a local and an employer, and I’m one of many employers who are struggling to find reasonable places for our staff to live.
‘‘The issue is people who buy up houses and put them in Airbnb to earn income from tourists.
‘‘Those are the ones who are, I believe, ruining the fabric of our community, and it’s been proven worldwide.’’
‘It’s one way to level the playing field’
Under the new tax rules, GST has to be levied on bookings through online marketplaces like Airbnb and Bookabach.
Till now, a large percentage of Airbnb hosts have ensured they’re under the $60,000 per annum in come threshold to avoid having to register for GST.
Local Findex tax accountant Daniel Gibbons says even if you’re not GST-registered, ‘‘what Airbnb or property management need to do is take 15% off the rental off you’’.
Could make a difference: Daniel Gibbons
‘‘They’re then giving you back a credit of 8.5% because you aren’t registered and can’t claim GST,’’ he says.
‘‘What effectively happens is you end up losing 6.5% of your rental to the government.
‘‘It’s effectively a way to level the playing field in one respect, that no matter if you’re registered or not, there’s going to be a GST outcome.
‘‘A lot of hotels have been pushing for this kind of outcome for some time.’’
Gibbons agrees it might make a landlord who rents out their home for Airbnb, rather than to long-term tenants, think twice.
However, he admits they might just rent out their home on Airbnb for more nights till they reach that $60,000 threshold.
‘‘The only other way is they can put their prices up, but people are probably maximising what they can get anyway.’’
Local accountant Jason Herron thinks a lot of Airbnb hosts will sit back and see what others do before putting up their prices, just so they don’t act in isolation and potentially price themselves out of the market.
‘‘It will be interesting over the next few months to see what people will do.’’
Warning of tax compliance ‘nightmare’
Queenstown accountant Kenny Frisby says how this is being implemented is creating a major headache.
His understanding is the new rules apply to property owners, whether they’re GST-registered or not.
However, he was shocked when Airbnb last week advised hosts it was the property manager or ‘listing owner’ who needed to make the GST declaration on their platform.
Frisby says this creates problems when the property manager has a different GST registration from the owner of the property they manage.
He notes IRD’s belatedly become aware of this issue, and is allowing property managers to administer the new rules themselves.
He suggests property managers get advice from their accountant before going down that path.
‘‘This puts a massive compliance issue on property managers who will then become responsible for all of their owners’ Airbnb income and the GST implications.
‘‘Where property managers are just a small business, like most of them in Queenstown, this is a potential tax compliance nightmare they are likely not well equipped to deal with.’’
Airbnb goes downtown
Hello, hello: Hello Queenstown’s Airbnb ‘airline lounge’ is going into this CBD space
Amid ongoing debate over Airbnb, two Queenstowners who have a fast-growing property management company specialising in Airbnb are three weeks away from establishing a downtown presence.
Through their company, Hello Queenstown, which manages almost 100 properties, Savannah Jackson and Ash Smyth have leased a former info centre on the corner of Shotover and Camp Sts.
The front half’s being fitted out as an exclusive ‘airline lounge’ for their guests.
‘‘Especially after the pandemic, everything is very contactless, so we wanted to have more of a direct connection with our guests,’’ Jackson says.
The balance of the site will be an activity booking agency.
“There has to be a balance”: Savannah Jackson
Jackson says she has no problem with new rules ensuring all Airbnb owners pay GST.
Noting they also have some long-term lets, she adds: ‘‘We feel areas like Lake Hayes Estate, Jack’s Point, Hanley’s Farm are definitely the residential areas and they shouldn’t have a great deal of Airbnb.
‘‘Obviously, certain areas like downtown Queenstown, along the foreshore, we need tourism accommodation and there aren’t enough hotels to cater for the massive amount of tourists who are coming.
‘‘There has to be a balance between the economy of tourism and therefore we need accommodation for them, but also for people living here.’’
