Auckland Targeted Rate

Auckland targeted rate on commercial accommodation properties

The Auckland City Council has recently introduced a targeted rate on commercial accommodation providers based on their capital value. This has seen significant rate increases for a number of businesses. 

We do not believe this is fair and we continue to raise our concerns on this issue at local and central government levels.

Next steps on disappointing targeted rate decision

Auckland Council's decision to vote in favour of a targeted rate was extremely disappointing for the industry. Hospitality New Zealand and other industry associations have been working on this issue since it was first announced in late 2016. This was a massive advocacy and policy battle and we are particularly concerned around the implementation and legality of the targeted rate that has never been clarified.

Legal argument

Legal advice provided to the industry suggests that to add this targeted rate on as a surcharge to guests bills is illegal. A targeted rate is a fixed cost of operating a business so adding it on as a surcharge (as the Council suggests we can) is incorrect. Similar surcharges have been proven to be illegal under the Fair Trading Act. Click here to view the legal opinion.

Unfairness factor

The targeted rate (unfairly) only asks the commercial accommodation sector to contribute to funding ATEED, however the commercial accommodation providers receive only 10% of the spending from Auckland visitors. The rest is spent in hospitality, retail, transport, etc.. not to mention in AirBnBs. The fairness factor has been a big part of the conversation as to why only one sector of tourism contribute to funding visitor promotions that benefit so many other sectors.

What now?

So what does this mean for Auckland Commercial accommodation operators - Operators who have been ring fenced as contributors to the targeted rate will be required to pay from 1 July. This money will contribute to ATEEDs budgeted expenditure on visitor attraction and major events with the aim to collect $13.45 million from the commercial accommodation sector annually. The amount an operator will be required to pay is dependent on which zone they fall into. 

Commercial accommodation providers who are now required to pay this targeted rate will have, by now, received notification from the Auckland Council about this.  If you are one of these businesses, we recommend you contact the Council directly and seek clarity on the targeted rate, any remission opportunities that might be available to you and also clarify how your targeted rate has been calculated, as there are parts of a building that are excluded from the rate such as a private residence that might be on site, conference rooms and public areas etc.

Hospitality New Zealand continues to work with other industry Associations and the Auckland Commerical Accommodation sector on this issue to determine our next steps.

As meaningful updates come to hand members will be kept informed via our membership communications and our Regional Managers are also available should members wish to speak to someone in person.

Media campaign

We have voiced our concerns in various Auckland media forums - including local community papers, starting with the latest article at the top.




Inside Tourism Column - Auckland Targeted Rate: an inelegant proposal based on convenience
Airbnb: open to bed tax here, already collecting in Europe, USA
Phil Goff: Bed tax should pay for Auckland's promotion


Submission on Auckland Targeted Rate proposal

This submission below was presented by Hospitality New Zealand on behalf of our 67 commercial accommodation members in the Auckland region. The Association has considered the 2017/2018 Annual Plan document and makes comment on the proposed targeted rate on commercial accommodation to fund visitor promotion in the city.

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