Auckland Targeted Rate

Auckland targeted rate on commercial accommodation properties


The Auckland City Council's Annual Plan proposes to implement a targeted rate on commercial accommodation providers based on their capital value. This could see a 150% to 300% rates increase for businesses.
 
We do not believe this is fair and have raised 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 benefits 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 pay 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.

Hospitality New Zealand will be regrouping with other industry Associations early next week (w/c 5 June) to determine our next steps.

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.

June


April


March

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

February




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.



Back to Top
Facebook Twitter