Auckland mayor Phil Goff has clarified Auckland Council's bed tax after some Airbnb hosts called the policy a "cruel punishment".
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The tax - a targeted rate on accommodation providers - was voted in 11-8 by the council last year, with the funds raised going to council-controlled organisation Auckland Tourism, Events and Economic Development, for tourism promotion and events sponsorship.
But around 1100 Auckland homeowners who rent out properties on sites like Airbnb have been stung too. NZME reports one Waiheke Island homeowner's rates have gone from $4191 a year to $13,628.
Mr Goff told The AM Show those renting out a single room, or those renting a house out for less than a 29-day period aren't liable to pay any extra.
He clarified the reason for the rates increase, saying those who never replied to Auckland Council letters were automatically allocated the highest tax rate.
"The council rating department sent out two letters asking people to clarify how long they'd be renting out their rooms or house, to determine the cost of the rates," Goff said.
"If the people haven't provided the information to get the big discounts that are available, then they'll be charged at the highest rate."
He says whichever rates the council has got wrong, they will "absolutely" reverse.
"Almost every query has had the rates go down, and often quite dramatically."
Goff said the bed tax was introduced after representatives from the hotel and motel industry approached him about Airbnb's advantage.
"They're in the same game, they let out short term accommodation to visitors to the city. They pay a business tax, always have done. These people [Airbnb hosts] are doing exactly the same thing but through a different mechanism don't pay anything at all, that's grossly unfair. You've got to have a level playing field."
The number of people renting out rooms or properties on Airbnb is estimated to be between 8000 and 12,000 - yet the number of properties hit with the targeted rate so far is about 1100.
A Deloitte report into Airbnb in New Zealand found that in 2017, 578,000 stays were booked with Airbnb - that's 1.4 million guests staying in 225 locations around the country.