Coromandel Town, New Zealand Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Coromandel Town

If you're considering offering your home, rental property, or holiday house for short-term rentals in Coromandel Town, there are several important regulations and tax implications to be aware of.

First, check with the Thames-Coromandel District Council on any specific rules they have for short-term accommodation. Some councils in New Zealand require properties used for short-term rentals to be registered. The Thames-Coromandel District Council had previously proposed a $200 "bach tax" for anyone renting out a home as short-term accommodation, but this was put on hold.

When a house is used as a holiday rental, it is not covered by the standard Residential Tenancies Act, so you'll need to create your own written rental agreement outlining terms and conditions. This should cover things like maximum number of guests, pets, smoking, parties, etc.

Income earned from short-term rentals, including through booking sites like Airbnb and Bookabach, is taxable and must be declared. GST rules apply if your rental income exceeds $60,000 in a 12-month period. You can claim expenses related to the rental, but special tax rules may limit what expenses are deductible based on the type of property and how it is used.

Your standard home insurance likely won't cover damage that occurs while the property is rented out, so you may need to arrange additional cover to protect the property, contents, and your liability in case a guest is injured.

It's also important to ensure your property complies with health and safety regulations for things like smoke alarms, safe decks and balconies, handrails, etc. The Coromandel Zone Plan provides guidance on well-managed catchments that enhance economic and environmental sustainability while mitigating natural risks.

In summary, while it's relatively straightforward to list your property for short-term rental, there are a number of tax, insurance, health and safety, and local regulations to navigate. Consulting with the Thames-Coromandel District Council, your insurance provider, and a tax professional is recommended before getting started with short-term rentals in Coromandel Town.

Short-Term Rental Licensing Requirement in Coromandel Town

According to the Thames-Coromandel District Council's Schedule of Fees and Charges for 2023/2024, a Short Term License for a premises costs $115.00. However, based on the information available on the council's website, it is unclear if there are any additional licensing requirements specifically for short-term rentals in Coromandel Town beyond this fee.

The Thames-Coromandel District Council had previously proposed a $200 "bach tax" for anyone renting out a home for short-term accommodation, but this proposal was put on hold. It is not evident from the current fee schedule or website if this tax was ever implemented.

Details are lacking on where to submit a short-term rental license application in Coromandel Town, what documentation may be required, how long the licensing process typically takes, or if there are any fines or penalties for operating a short-term rental without the proper license.

To get the most accurate and up-to-date information, it is recommended to contact the Thames-Coromandel District Council directly. They should be able to provide specifics on short-term rental regulations and licensing requirements that apply to properties in Coromandel Town.

Required Documents for Coromandel Town Short-Term Rentals

Based on the information available on the Thames-Coromandel District Council website, the specific documentation required to operate a short-term rental in Coromandel Town is not clearly outlined. However, there are a few key things to consider:

• Short-Term License: The Thames-Coromandel District Council's Schedule of Fees and Charges for 2023/2024 lists a Short Term License for a premises at a cost of $115.00. It's unclear what paperwork is needed to apply for this license.
• Resource Consent: Depending on the specifics of your short-term rental operation, you may need to apply for a resource consent. The District Plan controls how land can be used and developed. Visitor accommodation is defined as stays of less than 50 days per calendar year. In most locations, visitor accommodation within an existing residential building is a permitted activity subject to meeting certain standards. However, if your rental falls outside those parameters, a resource consent may be required. The application would need to assess any effects on the coastal environment if located in that area.
• Building Compliance: Ensure your property complies with all building regulations and has the necessary permits, such as for any renovations undertaken to prepare the property for rental use. This may require providing documentation of building consents and code compliance certificates.
• Tenancy Agreement: When a property is used for short-term holiday rentals, it is not covered by the Residential Tenancies Act. You will need to create your own written rental agreement outlining terms and conditions for guests.
• Tax Documentation: Keep clear records of all income and expenses related to the short-term rental for tax purposes, as this income must be declared. You may need to register for and file GST returns if your annual turnover exceeds $60,000.

For the most accurate and current information on required documents, it's best to contact the Thames-Coromandel District Council directly. They can advise on the specific licensing, resource consent, or other approvals needed for your particular short-term rental situation in Coromandel Town.

Coromandel Town Short-Term Rental Taxes

When operating a short-term rental business in Coromandel Town, there are two main types of taxes you need to be aware of: Goods and Services Tax (GST) and income tax.

Goods and Services Tax (GST)

GST is a consumption tax of 15% applied to most goods and services in New Zealand, including short-term rental accommodation. If your annual turnover from your short-term rental exceeds NZ$60,000, you must register for GST. Once registered, you will need to charge GST on all rental income and file regular GST returns with Inland Revenue.

However, you can also claim GST on business expenses related to your short-term rental. This includes things like cleaning services, utilities, and any furnishings or supplies purchased for the rental property. Keep accurate records of all income and expenses to correctly calculate your GST liability.

Income Tax

All income earned from your short-term rental is subject to income tax. The amount of tax you'll pay depends on your total taxable income for the year. For the 2023 tax year, income tax rates are:

1. Up to $14,000 - 10.5%
2. Over $14,000 and up to $48,000 - 17.5%
3. Over $48,000 and up to $70,000 - 30%
4. Over $70,000 and up to $180,000 - 33%
5. Over $180,000 - 39%

If your short-term rental income is under NZ$60,000 for the year, you may be able to use the standard-cost method. For the 2023-2024 income year, the standard-cost is NZ$61 per night for homeowners and NZ$55 per night for renters. Income up to this nightly rate is exempt, and you only pay tax on amounts charged above the standard-cost.

Deductions and Write-Offs

To reduce your taxable rental income, you can deduct eligible expenses related to the property. Common deductions for short-term rentals include:

1. Advertising costs
2. Cleaning and laundry services
3. Utilities like electricity and internet
4. Rates and insurance
5. Repairs and maintenance
6. Supplies provided to guests
7. A portion of mortgage interest (subject to interest limitation rules)

If you also use the property personally, you'll need to apportion expenses between rental use and private use. Only the portion attributed to the rental activity is deductible.

It's important to keep detailed records of all rental income and expenses to accurately calculate your tax liability. Consult with a qualified tax professional to ensure you are meeting all tax obligations for your short-term rental business in Coromandel Town.

New Zealand Wide Short-Term Rental Rules

While specific short-term rental regulations can vary by local council in New Zealand, there are some general rules and considerations that apply nationwide that are relevant for hosts in Coromandel Town:

Taxation: All income earned from short-term rentals, including through platforms like Airbnb and Bookabach, is taxable and must be declared. GST rules apply if your rental income exceeds $60,000 in a 12-month period. Special tax rules may limit what expenses you can claim based on the type of property and how it is used. The "mixed-use asset rules" apply if you use the property both personally and for rental income under certain conditions.

Insurance: Standard home and contents insurance likely won't cover damage that occurs while the property is rented out. Additional cover may be needed for the property, contents, and host liability in case a guest is injured. Some hosting platforms offer a level of cover, but it's best to discuss your short-term rental plans with your insurance provider.

Health and Safety: Ensure your property has working smoke alarms, a first aid kit, and complies with building safety regulations. Clearly communicate fire escape routes and emergency contacts to guests. Address any potential hazards.

Rental Agreements: Short-term holiday rentals are not covered by the Residential Tenancies Act, so you'll need to establish your own written rental agreement with guests outlining terms and conditions around things like maximum occupancy, pets, smoking, parties, etc.

Local Council Rules: Check with the Thames-Coromandel District Council for any specific requirements around short-term rentals, such as property registration, zoning restrictions, parking rules, noise limits, etc. Some councils have proposed or implemented additional taxes or fees for short-term accommodation providers.

Airbnb has proposed a nationwide regulatory framework for short-term rentals in New Zealand to streamline compliance and support sustainable growth of the sector. Key components would include a Code of Conduct for guests and hosts, data sharing with the government, a sliding scale of regulation based on hosting type, and a visitor levy to fund local housing and infrastructure needs. However, this has not yet been implemented.

Overall, while operating a short-term rental can provide valuable income, it's important for hosts in Coromandel Town and across New Zealand to understand and comply with all relevant national and local regulations. Consulting with the local council, tax professionals, and insurance providers is recommended.

Does Coromandel Town Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and Bigger Pockets, it appears that Coromandel Town and the broader Thames-Coromandel District Council area are not particularly strict in enforcing short-term rental regulations compared to some other parts of New Zealand.

The Thames-Coromandel District Council had previously proposed a $200 "bach tax" on short-term rentals, but this was put on hold and does not seem to have been implemented. There are no clear indications that Coromandel Town requires any special permits or licenses for Airbnb-style rentals beyond the standard $115 Short Term License fee listed in the council's fee schedule.

While the rules around taxation, insurance, health, and safety apply in Coromandel as they do nationwide, there is little evidence of active enforcement or hosts facing penalties for non-compliance. Anecdotally, many baches (holiday homes) in the Coromandel area have operated as short-term vacation rentals for years without issue.

Overall, Coromandel Town and the wider Coromandel Peninsula appear to be relatively Airbnb-friendly destinations, with numerous listings available on platforms like Airbnb and Bookabach. The scenic coastal setting makes it a popular spot for holiday rentals.

However, hosts should still take care to understand and follow all relevant national and local regulations. With the growing popularity of short-term rentals, it's possible enforcement may tighten in the future. But for now, Coromandel seems to be a fairly low-risk location for responsibly managed short-term rentals compared to areas with stricter rules and oversight.

How to Start a Short-Term Rental Business in Coromandel Town

Starting a short-term rental business in Coromandel Town can be a rewarding venture. Here are the key steps to get started, along with tips for success:

1. Research local regulations: Before getting started, thoroughly research the rules and regulations around short-term rentals in Coromandel Town and the Thames-Coromandel District. Check if you need to register your property, obtain any licenses or permits, or meet specific health and safety standards. The Thames-Coromandel District Council website is a good place to start.
2. Determine your target market: Consider who your ideal guests are and what type of property will best suit their needs. Coromandel Town attracts a mix of families, couples, and groups looking for a scenic coastal getaway. A well-appointed bach or holiday home could be a good fit.
3. Prepare your property: Ensure your rental is clean, well-maintained, and properly equipped for guests. Consider any upgrades or amenities that will make your property stand out, like quality linens, kitchen essentials, or outdoor living spaces. Stage the property with attractive decor and take professional photos for your listing.
4. Set up your business structure: Decide on the right business structure for your rental, such as a sole proprietorship or company. Open a separate bank account to keep your rental income and expenses organized. Consult with a tax professional to understand your tax obligations, including income tax and GST if your annual turnover exceeds $60,000.
5. Create a compelling listing: Craft an enticing description of your property that highlights its best features and the experience guests can expect. Use high-quality photos and include key details like the number of bedrooms, amenities, and proximity to local attractions. Be accurate and honest to ensure guests have realistic expectations.
6. Choose a pricing strategy: Research comparable rentals in the area to determine a competitive nightly rate. Consider factors like seasonality, events, and demand when setting your prices. You may want to offer discounts for longer stays or during slower periods to attract bookings.
7. Develop a rental agreement: Create a clear and comprehensive rental agreement that outlines your house rules, booking policies, and guest expectations. Include details around check-in/out times, maximum occupancy, pet policies, smoking rules, and any other important guidelines. Have guests sign the agreement before their stay.
8. Automate your operations: Use vacation rental software or channel managers to streamline your booking and communication processes. These tools can help you sync calendars across multiple listing sites, automate guest messages, and manage reservations more efficiently. This will save you time and ensure a smooth experience for guests.
9. Prioritize guest communication: Respond promptly to inquiries and maintain open communication with guests before, during, and after their stay. Provide detailed check-in instructions, local recommendations, and any other helpful information. Be available to answer questions or address concerns throughout their visit. Good communication is key to positive reviews and repeat bookings.
10. Manage your reviews and reputation: Encourage satisfied guests to leave reviews on your listing sites. Respond professionally to any negative feedback and use it as an opportunity to improve. Maintain a high standard of cleanliness, quality, and service to build a strong reputation over time.

By following these steps and continually optimizing your short-term rental business, you can successfully launch and grow your venture in Coromandel Town. Stay informed of any changes to local regulations, adapt to market trends, and prioritize creating memorable guest experiences to set yourself up for long-term success.

Who to Contact in Coromandel Town about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations, licensing, zoning, or other requirements in Coromandel Town, the best place to start is by contacting the Thames-Coromandel District Council directly.

Thames-Coromandel District Council
Address: 515 MacKay Street, Thames, 3500
Phone: 07 868 0200
Email: customer.services@tcdc.govt.nz
Website: https://www.tcdc.govt.nz/

You can email their customer service team, call the 24-hour service line, or submit an online request for service through their website contact form. The council staff can provide the most accurate and up-to-date information on any short-term rental rules, required permits or licenses, fees, and zoning restrictions that apply to properties in Coromandel Town.

It's also worth reviewing the Thames-Coromandel District Council website for any relevant policies, such as their Leasing and Licences to Occupy Policy which outlines rental rates and categories for different types of property uses: https://www.tcdc.govt.nz/Our-Council/Bylaws-Codes-and-Policies/Policies/Leasing-and-Licences-to-Occupy-Policy

1. In addition to contacting the council, you may find it helpful to connect with other short-term rental hosts and property investors in the area. The New Zealand Property Investors' Federation has a forum where you can ask questions and learn from experienced investors: https://www.enz.org/forum/forumdisplay.php?f=21
2. The PropertyTalk.com forums also have a section dedicated to discussions around property investment in the Waikato/Coromandel region: https://www.propertytalk.com/forum/forumdisplay.php?126-Waikato-Coromandel

While online forums can provide valuable insights from other hosts, always verify any regulatory information with the Thames-Coromandel District Council, as rules can change over time. By contacting the council and connecting with the local host community, you'll be well-equipped to navigate the short-term rental landscape in Coromandel Town.

What Do Airbnb Hosts on Reddit and Bigger Pockets Think about Local Regulations in Coromandel Town?

After searching online forums like Reddit and Bigger Pockets, I did not find any discussions or posts specifically related to the experiences of short-term rental hosts in Coromandel Town and their thoughts on local regulations.

The closest relevant discussion was a Reddit thread in the r/auckland subreddit titled "3 months in NZ, need a home base, where to live?". In this post, someone moving to New Zealand for a few months was seeking advice on the best places to stay. A few commenters mentioned the Coromandel area in general as a nice option, but did not go into any details about the short-term rental market or regulations in Coromandel Town specifically.

On Bigger Pockets, there were several posts about short-term rental regulations, but they focused on other cities and regions like Colorado ski towns and Charlottesville, VA. These threads discussed how certain areas are implementing stricter rules on Airbnb and non-owner occupied short-term rentals. However, none of the posts mentioned anything about the regulatory environment in Coromandel Town or New Zealand.

The lack of discussion on these forums does not necessarily mean there are no issues or considerations around short-term rental regulations in Coromandel Town. It may just indicate the area does not have a large community of hosts active on these particular sites. As noted in a previous section, Coromandel Town seems to be relatively friendly to short-term rentals compared to some other parts of New Zealand, with no obvious signs of strict enforcement or major regulatory changes recently.

However, to get the most accurate and up-to-date information, it is still best to contact the Thames-Coromandel District Council directly, as they can advise on any specific rules, permits, taxes or zoning requirements that apply to short-term rentals in Coromandel Town.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.