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

What are Short-Term Rental (Airbnb, VRBO) Regulations in Invercargill, New Zealand?

Short-term rentals through booking platforms like Airbnb and VRBO have surged in popularity in recent years, providing an attractive income stream for property owners. However, it's crucial to understand the local regulations before starting a short-term rental business in Invercargill, New Zealand.

Starting a Short-Term Rental Business in Invercargill

When launching a short-term rental business in Invercargill, there are several key steps to follow:

• Check local zoning laws: Ensure your property is zoned for short-term rentals, which typically apply to stays of 30 days or less. Invercargill's District Plan outlines the rules, which vary based on factors like location, type of accommodation, and number of guests.
• Obtain necessary permits: You may need to apply for resource consent under the Southland District Plan, depending on your specific circumstances. Visitor accommodation is permitted in rural and residential zones for 5 or fewer paying guests, but requires consent for 6+ guests or in certain zones like Low-Density Residential or Industrial.
• Register with the council: Some councils, like Queenstown Lakes District Council, require short-term rentals to be registered. Check with the Invercargill City Council to see if registration is mandatory.
• Comply with building and safety standards: Changing a building's use, such as converting a residential home into visitor accommodation, may trigger requirements under the Building Act to upgrade fire safety facilities. Ensure your property meets all health and safety regulations.
• Understand tax implications: Income from short-term rentals, even if irregular, is taxable and must be declared. You can claim expenses if you include the rental income in your tax return. Special rules apply for calculating income and expenses. If your annual income exceeds $60,000, you may need to register for GST.
• Consider forming a business entity: Setting up a formal business structure like an LLC can provide liability protection and tax benefits. Consult with a lawyer or accountant to determine the optimal approach for your situation.
• Obtain proper insurance: Standard home and contents insurance may not cover short-term rental activities. Speak with your insurer about appropriate coverage, including property damage, contents, theft, and public liability in case a guest is injured.

By following these steps and thoroughly researching the applicable regulations, you can establish a compliant and successful short-term rental business in Invercargill. The Southland District Plan and Invercargill City Council are the best resources for the most current and comprehensive information on local rules.

As the short-term rental market continues to evolve, it's wise to stay informed on any regulatory changes that may impact your business. Connecting with other local hosts through forums or meetup groups can be a great way to share experiences and navigate the dynamic landscape together.

Short-Term Rental Licensing Requirements in Invercargill

To operate a short-term rental in Invercargill, you may need to obtain the appropriate licenses and permits from the Southland District Council. The specific requirements depend on factors like the property's location, type of accommodation, and number of guests.

Key licensing considerations include:

Resource Consent: STRs are permitted in rural and residential zones for 5 or fewer paying guests. For 6+ guests, or in certain zones like Low-Density Residential or Industrial, resource consent is required. The consent process assesses the activity's environmental effects and compliance with the District Plan.

Building Consent: Changing a building's use, such as from a residential home to visitor accommodation, may trigger Building Act requirements to upgrade fire safety facilities. Consult with the Council to determine if your STR needs building consent.

Registration: Some councils require STRs to be registered. Check with the Invercargill City Council to see if this applies in your case.

To apply for the necessary licenses and permits, contact the Southland District Council:

Southland District Council
PO Box 903
15 Forth Street
Invercargill 9840
Phone: 0800 732 732
Email: emailsdc@southlanddc.govt.nz

The Council's website has a dedicated section for licensing and permits where you can access application forms and fee schedules. Fees vary based on the specific licenses required. For example, the fee for a Visitor Accommodation Resource Consent ranges from $1,000 to $4,000+, depending on the scale and complexity.

Processing times also vary, but straightforward applications are typically handled within 20 working days. More complex proposals requiring public notification or additional information requests will take longer.

Operating an STR without the required licenses is an offense under the Resource Management Act. Penalties can include fines up to $300,000 and $10,000 per day for continuing offenses. The Council has the power to issue infringement notices or prosecute serious breaches.

To ensure compliance and avoid penalties, it's critical to engage with the Southland District Council early in your STR planning process. They can provide tailored advice on the licenses you need and guide you through the application process. With the proper approvals in place, you'll be well-positioned to launch a successful and compliant short-term rental business in Invercargill.

Required Documents for Invercargill Short-Term Rentals

When applying for a short-term rental license in Invercargill, you'll need to submit several documents to the Southland District Council. The specific requirements may vary based on your property and the type of license needed, but generally include:

1. Completed Application Form: Fill out the relevant application form for your license type, such as the Visitor Accommodation Resource Consent form. Provide detailed information about your property, the proposed short-term rental activity, and contact details.
2. Certificate of Title: Submit a current copy of the Certificate of Title for the property, no more than 3 months old. This document proves ownership and identifies any registered interests or encumbrances on the property.
3. Site Plan: Provide a scaled site plan showing the location of the property, existing and proposed buildings, access points, parking areas, and outdoor spaces. The site plan helps the Council assess the suitability of the property for short-term rental use.
4. Floor Plans: Submit floor plans of the building, indicating the use of each room (e.g., bedrooms, living areas, kitchens). Highlight any proposed changes to convert the property for short-term rental purposes.
5. Parking Plan: If your property has dedicated off-street parking, provide a parking plan showing the location and dimensions of the parking spaces.
6. Building Warrant of Fitness (BWOF): For properties with specified systems like fire alarms or sprinklers, a current BWOF is required to confirm these systems are being properly maintained.
7. Proof of Compliance: Depending on your property, you may need to provide additional documentation to demonstrate compliance with building codes, fire safety regulations, and health and hygiene standards.
8. Application Fee: Include payment for the applicable license fees when submitting your application. Fees vary based on the license type and are outlined in the Council's fee schedule.

These documents should be submitted to the Southland District Council, either in person at their office (15 Forth Street, Invercargill) or by email (emailsdc@southlanddc.govt.nz). The Council's resource management team can assist with any questions about the application process or required documents.

Providing complete and accurate documentation upfront can help streamline the licensing process and avoid delays. The Council may request additional information during the assessment phase, so it's important to respond promptly to any queries. By carefully preparing these required documents, you'll be well on your way to obtaining the necessary approvals for your short-term rental business in Invercargill.

Invercargill Short-Term Rental Taxes

As a short-term rental operator in Invercargill, it's crucial to understand your tax obligations. The two main types of taxes that may apply to your rental business are income tax and Goods and Services Tax (GST).

Income Tax

All income you earn from short-term rentals is generally taxable and must be declared in your annual income tax return. The tax rate depends on your total taxable income and ranges from 10.5% to 39%.

You can deduct eligible expenses related to your rental business, such as:

1. Advertising and marketing costs
2. Cleaning and maintenance expenses
3. Property management fees
4. Utilities (e.g., electricity, gas, internet)
5. Insurance premiums
6. Depreciation on chattels (e.g., furniture, appliances)
7. Interest on loans used to purchase or improve the rental property (subject to certain limitations)
8. Council rates and fees

Keeping accurate records of your income and expenses is essential for calculating your taxable profit correctly.

Goods and Services Tax (GST)

If your short-term rental income exceeds $60,000 in a 12-month period, you must register for GST. The current GST rate is 15%, which you'll need to collect on your rental income and pay to the Inland Revenue Department (IRD).

Being GST-registered also allows you to claim back GST on related business expenses. However, if you sell your rental property or change its use, you may need to pay GST on the sale price.

Possible Deductions and Write-Offs

In addition to the expenses mentioned above, there are other possible deductions and write-offs available for short-term rental hosts in Invercargill:

1. Accounting and legal fees related to your rental business
2. Home office expenses (if you use part of your home for rental-related work)
3. Vehicle expenses (if used for rental-related purposes, like property maintenance or key handovers)
4. Initial repairs and setup costs when first renting out the property
5. Mortgage repayment
6. Losses from previous years (subject to ring-fencing rules)

It's important to note that special tax rules apply to short-term rentals, which can impact the expenses you can claim. These rules vary based on factors like the type of property, how it's used, and the number of days it's rented out.

To ensure compliance and maximize your deductions, consult with a qualified tax professional who can provide personalized advice based on your specific circumstances. They can help you navigate the complex tax landscape and optimize your financial outcomes as a short-term rental operator in Invercargill.

New Zealand Wide Short-Term Rental Rules

In addition to Invercargill-specific regulations, there are several national laws and tax rules that apply to short-term rentals across New Zealand, including in Invercargill:

Income Tax: All income earned from short-term rentals is subject to income tax. The tax rate depends on your total taxable income for the year, with rates ranging from 10.5% to 39%. You can deduct eligible expenses like rates, insurance, repairs, etc. to reduce your taxable rental profit. Special rules apply for "mixed-use" holiday homes that are sometimes used personally and sometimes rented out.

Goods and Services Tax (GST): If your annual turnover from all taxable activities, including short-term rental income, exceeds NZ$60,000, you must register for and charge 15% GST on your rental income. You can then claim back GST on related expenses. From 1 April 2024, short-term rental platforms like Airbnb must collect GST on behalf of hosts, even those earning under $60,000/year.

Health and Safety at Work Act 2015: Short-term rental hosts have responsibilities to ensure guest health and safety, including identifying and managing hazards, maintaining smoke alarms, providing evacuation instructions, etc. While not legally required yet, it's wise for short-term rentals to meet the Healthy Homes Standards for heating, insulation, ventilation, etc.

Building Act 2004: Short-term rentals may require building consent for any renovations or change of use. Hosts must ensure their property complies with the Building Code for things like fire safety, sanitation, structural stability, etc.

Privacy Act 2020: Hosts must protect guest privacy and personal information. Only collect necessary data, store it securely, and don't disclose it without permission.

Consumer Guarantees Act 1993 and Fair Trading Act 1986: Short-term rental hosts must accurately represent their property and not mislead guests. Services must be provided with reasonable care and skill. Hosts may be liable if guests suffer loss or damage from an unsafe property.

These nationwide rules provide a baseline for short-term rental operations, but it's crucial for Invercargill hosts to also understand and comply with any additional local council requirements. Consulting with the Invercargill City Council and staying updated on evolving regulations is key to running a successful and compliant short-term rental business.

Does Invercargill Strictly Enforce STR Rules?

Based on the information available, Invercargill appears to take a balanced approach to short-term rental regulation and enforcement. The city has established clear rules through the Southland District Plan, outlining when resource consent is required based on factors like location, accommodation type, and guest numbers. This provides a framework for hosts to operate legally.

However, there is limited evidence to suggest Invercargill is overly strict or aggressive in enforcing these rules compared to other New Zealand cities. The Southland District Council's website provides guidance for hosts and encourages them to check if their activity needs resource consent or triggers Building Act requirements. The tone seems to be more about education and compliance assistance rather than punitive enforcement.

Discussions on forums like Reddit and Bigger Pockets do not raise any major red flags about Invercargill being particularly hostile to short-term rentals. While there are some general debates about the pros and cons of Airbnb and its impact on communities, no comments single out Invercargill as a problematic city for hosts.

Overall, Invercargill seems to strike a reasonable balance - having rules in place to manage the impacts of short-term rentals, but not being so restrictive as to completely discourage hosting. The city appears to be Airbnb-friendly, as long as hosts do their due diligence, obtain the proper approvals where needed, and operate responsibly. With careful planning and compliance, short-term rental hosts can find success in Invercargill's regulated but welcoming environment.

How to Start a Short-Term Rental Business in Invercargill

Starting a short-term rental business in Invercargill requires careful planning and execution. Here's a step-by-step guide to help you successfully launch your venture:

1. Research local regulations: Familiarize yourself with Invercargill's short-term rental rules, including zoning laws, permits, and licensing requirements. Consult the Southland District Plan and engage with the Invercargill City Council to ensure compliance.
2. Develop a business plan: Create a comprehensive plan outlining your business goals, target market, unique selling points, financial projections, and marketing strategies. Conduct a thorough analysis of Invercargill's short-term rental market to identify trends and opportunities.
3. Choose the right property: Select a property that aligns with your business plan and target audience. Consider factors like location, amenities, and potential for generating high occupancy rates. Ensure the property complies with local regulations and can be easily adapted for short-term rental use.
4. Obtain necessary licenses and permits: Apply for the required licenses and permits, such as resource consent, building consent, and registration with the council. Work closely with local authorities to navigate the application process and address any concerns.
5. Set up your business structure: Decide on the most appropriate business entity for your short-term rental, such as a sole proprietorship, partnership, or limited liability company (LLC). Register your business with the New Zealand Companies Office and obtain an IRD number for tax purposes.
6. Prepare your property:Furnish and equip your rental to create a welcoming and comfortable environment for guests. Invest in high-quality amenities, linens, and appliances. Ensure the property meets all health and safety standards, including smoke alarms, fire extinguishers, and emergency evacuation plans.
7. Establish a pricing strategy: Research comparable short-term rentals in Invercargill to determine competitive rates. Implement a dynamic pricing model that adjusts rates based on seasons, events, and demand. Consider offering promotions or discounts to attract bookings during slower periods.
8. List your property on booking platforms: Create attractive listings on popular short-term rental platforms like Airbnb and Bookabach. Craft compelling descriptions, showcase high-quality photos, and highlight your property's unique features. Ensure your listing complies with each platform's policies and guidelines.
9. Develop a marketing plan: Promote your short-term rental through various channels, including social media, local tourism websites, and targeted advertising. Collaborate with local businesses and attractions to cross-promote your property and offer special packages or experiences to guests.
10. Manage your operations: Establish efficient systems for handling bookings, guest communication, cleaning, and maintenance. Consider using vacation rental software to streamline processes and automate tasks. Provide exceptional customer service to ensure positive reviews and repeat bookings.

Tips for success:

1. Stay informed about evolving short-term rental regulations in Invercargill and adapt your business accordingly.
2. Prioritize guest satisfaction by providing high-quality amenities, clear communication, and prompt issue resolution.
3. Continuously monitor and analyze your performance metrics, such as occupancy rates, revenue, and guest feedback, to identify areas for improvement.
4. Network with other short-term rental operators in Invercargill to share insights, best practices, and collaborate on initiatives to support the local industry.
5. Maintain accurate financial records and consult with a tax professional to ensure compliance with New Zealand's tax laws for short-term rentals.

By following these steps and implementing the provided tips, you'll be well-positioned to launch and grow a successful short-term rental business in Invercargill. Remember to remain adaptable, as the industry is constantly evolving, and prioritize delivering exceptional guest experiences to stand out in the competitive market.

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

When navigating the short-term rental landscape in Invercargill, it's essential to know who to contact for guidance on regulations, zoning, and compliance. Here are the key contacts and resources:

Invercargill City Council

The Invercargill City Council is the primary authority for short-term rental regulations and zoning. They can provide information on district plan rules, resource consents, building consents, and registration requirements.

1. Phone: (03) 211 1777
2. Email: service@icc.govt.nz
3. Address: 101 Esk Street, Private Bag 90104, Invercargill 9840
4. Website: icc.govt.nz

Southland District Council

For properties located in the broader Southland region, the Southland District Council is responsible for administering the district plan and processing resource consents.

1. Phone: 0800 732 732
2. Email: emailsdc@southlanddc.govt.nz
3. Address: PO Box 903, 15 Forth Street, Invercargill 9840

Tenancy Services

While primarily focused on long-term tenancies, Tenancy Services can provide general advice on rental regulations and compliance.

1. Phone: 0800 836 262
2. Website: tenancy.govt.nz

Online Host Communities

Connecting with other short-term rental hosts can be a valuable way to share experiences, ask questions, and stay informed about local regulations. Some useful online communities include:

Airbnb Hosts Forum: airhostsforum.com

This global forum is dedicated to connecting Airbnb hosts from around the world. You can join discussions, read articles, and access resources to help navigate the short-term rental industry.

New Zealand Airbnb Hosts Facebook Group: facebook.com/groups/airhostsnz

This Facebook group is specifically for Airbnb hosts in New Zealand. It's a great place to ask location-specific questions, share tips, and network with fellow Kiwi hosts.

Invercargill Airbnb Hosts Facebook Group: facebook.com/groups/invercargillairbnbhosts

While a smaller community, this group focuses on Airbnb hosting in Invercargill. It can be a useful resource for discussing local regulations, events, and market trends.

By engaging with these contacts and communities, short-term rental hosts in Invercargill can access the information and support needed to operate successfully and compliantly. Building relationships with local authorities and fellow hosts is key to navigating the dynamic world of short-term rentals in the city.

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

After searching various online forums and communities, including Reddit, Bigger Pockets, Facebook, Twitter, and Airbnb-specific groups, there appears to be limited discussion directly related to Invercargill's short-term rental regulations from the perspective of local hosts. However, some insights can be gleaned from broader conversations about New Zealand's Airbnb landscape:

Reddit - r/newzealand: In a thread titled "Airbnbs in NZ love their fines," users discuss the prevalence of strict house rules and cleaning expectations in New Zealand Airbnbs. While not specific to Invercargill, the conversation highlights a general frustration with hosts imposing excessive fines and chores on guests. Some commenters express a preference for traditional hotels or motels to avoid these issues.

Reddit - r/newzealand: Another thread, "GST on Airbnb and Uber now hangs on the election," touches on the potential impact of GST changes on Airbnb hosts. The discussion focuses on how the proposed rules would affect hosts who are not GST-registered, with the tax being collected via the Airbnb platform. While not directly related to Invercargill's regulations, it shows an awareness of the evolving tax landscape for short-term rentals in New Zealand.

Despite the lack of Invercargill-specific content, these discussions provide some context on the broader challenges and sentiments surrounding Airbnb hosting in New Zealand. Hosts appear to be navigating a complex regulatory environment, with concerns around taxation, compliance, and guest expectations.

It's important to note that the absence of Invercargill-focused discussions on these platforms does not necessarily indicate a lack of engagement from local hosts. Many may choose to seek guidance through official channels, such as the Invercargill City Council or Southland District Council, rather than public forums.

To gain a more comprehensive understanding of Invercargill hosts' experiences and opinions on local regulations, it may be valuable to reach out to the local Airbnb community directly or attend relevant events and meetings organized by the city council or tourism authorities. This direct engagement could provide more specific insights into the challenges and opportunities faced by short-term rental operators in Invercargill.

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.