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

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

Short-term rentals through booking platforms like Airbnb and Bookabach have become increasingly popular in Oamaru and throughout New Zealand in recent years. However, it's important for property owners to be aware of the various regulations and requirements that apply to operating short-term holiday rentals.

Starting a Short-Term Rental Business in Oamaru

To start offering short-term accommodation in Oamaru, there are a few key things to consider:

• Check the rules with the Waitaki District Council, as some councils require short-term rentals to be registered. The council can advise on any specific regulations or zoning restrictions that may apply.
• Ensure the property meets all building code requirements, especially for rentals that sleep more than 5 people. Some Oamaru residents have called for tighter building code standards to be applied to Airbnbs.
• Understand the tax implications. Income from providing short-term accommodation, even if irregular, is taxable and must be declared. GST may also apply if your annual income exceeds $60,000.
• Review your insurance coverage, as standard home and contents policies may not cover short-term rentals. You may need to pay a higher premium or get additional cover for property damage, theft, or public liability in case a guest is injured.
• Have a written rental agreement that covers house rules, number of guests, parking, pets, smoking, parties, check-in/check-out times, and processes for damages or disputes. Some booking sites provide agreement templates.

It's also important to note that if you are currently renting out a property long-term, you cannot ask tenants to temporarily vacate in order to rent the property as a short-term holiday home instead. Tenants must abide by their lease and get permission for any subletting.

The Waitaki District Council provides some community housing for elderly residents, but these units cannot be used as short-term visitor accommodations. Changing the use of a building from residential to short-term rental may require notifying the council to ensure it still complies with the building code under its new use.

Short-term rentals remain a hot topic in Oamaru and the surrounding region. A recent report found that in some communities up to 13% of housing stock is being used for short-term rentals, impacting the availability of long-term rentals for workers. Some motel owners argue that Airbnb operators need to be on a level playing field in terms of commercial costs and regulations.

As the short-term rental market continues to evolve, it's crucial for property owners to stay up-to-date on all the relevant rules and requirements. By ensuring you are operating legally and responsibly, you can maximize the benefits of renting out your property while being a good neighbor and community member.

Short-Term Rental Licensing Requirements in Oamaru

To launch and operate a short-term rental in Oamaru, property owners must notify the Waitaki District Council of the change of use for the building. This is required under Section 114 of the Building Act 2004.

To notify the council, STR operators need to:

1. Fill out and submit the Notification of Proposed Change of Use (COU) form, available on the council website.
2. Wait for written confirmation from the council that the building complies with the Building Code requirements for its new use before beginning to rent it out. The council will assess whether the building meets the code as nearly as is reasonably practicable (ANARP).
3. Obtain a building consent if required to make any alterations to the building to meet Building Code compliance for the new use. The specific code requirements will vary depending on the nature of the change of use.
4. Potentially obtain a resource consent to permit the new activity, depending on the property's zoning and the scale of the short-term rental operation.
5. Pay any applicable development contribution fees. These one-time fees fund the increased demand on infrastructure like water, wastewater, and roads that result from the change of use. For example, converting a garage or a house into an Airbnb accommodation would trigger these fees.

There is no registration or licensing fee for notifying the council of the change of use itself. However, failing to notify the council before changing the use of the building can result in a fine of up to $5,000.

The timeline for approval depends on the specific change of use and how many alterations are needed to make the building comply with its new use under the Building Code. The council must be satisfied the building is safe and healthy for its intended new use.

It's important to note that Oamaru does not currently have a formal STR registration system or require STR operators to obtain a special license, unlike some other New Zealand cities. However, the Waitaki District Council is reviewing its regulations as part of its District Plan update. Proposed new rules for STRs are expected to be released for public feedback in 2024.

Some commercial accommodation providers in Oamaru have called on the council to take bolder action in regulating Airbnbs, citing concerns about building safety, unfair competition, and negative impacts on the wider tourism economy. Suggestions include requiring Airbnbs to meet the same building code standards as commercial accommodations, pay commercial rates for utilities and insurance, and obtain some form of certification.

As the STR market continues to grow and evolve in Oamaru, it's crucial for hosts to stay informed about their obligations under the Building Act and any potential new regulations that may be introduced in the future. By working proactively with the council and taking a responsible approach to hosting, STR operators can help create a more sustainable and equitable short-term rental sector in the city.

Required Documents for Oamaru Short-Term Rentals

To notify the Waitaki District Council of a change of use to a short-term rental accommodation, property owners need to submit the following documents:

Notification of Proposed Change of Use (COU) Form: This form, available on the council website, is used to notify the council that a building will be changing its use, such as from a residential home to a short-term rental. It requires details about the property, the proposed new use, the maximum number of occupants, and any building work that will be carried out.

Site and Floor Plans: These plans show the layout of the property, the rooms that will be used for accommodation, and any proposed alterations. They help the council assess whether the building will comply with the Building Code under its new use in terms of things like fire safety, sanitation, and access.

Parking Plan: If the property has on-site parking available for guests, a parking plan should be provided showing the location and dimensions of the parking spaces. The council will review this to ensure there is adequate parking for the scale of the accommodation.

Building Warrant of Fitness (BWOF): If the property has any specified systems like fire alarms, sprinklers, or lifts, a current BWOF is required to show these systems have been maintained and inspected annually in accordance with the compliance schedule. The BWOF can be obtained from the Independent Qualified Person (IQP) who carries out the inspections.

Fire Evacuation Scheme: Depending on the size and nature of the short-term rental, a fire evacuation scheme approved by Fire and Emergency New Zealand (FENZ) may be required. This shows there are adequate provisions for fire safety and evacuation procedures in place.

Certificate of Title: This document proves ownership of the property and can be obtained from Land Information New Zealand (LINZ). It may be required if there are any concerns around the legal right to use the property for short-term rentals, such as restrictive covenants or cross-leases.

Proof of Compliance with District Plan Rules: Depending on the property's zoning, evidence may be needed to show the short-term rental activity complies with the relevant rules in the Waitaki District Plan. For example, there may be limits on the number of nights per year a property can be used for short-term rentals in certain residential zones.

Once all the required documents are submitted, the council will review the change of use notification and issue a confirmation letter if satisfied the building complies with the Building Code for its new use. They may request additional information or impose conditions to ensure compliance.

It's important to note that the exact documents required may vary depending on the specific property and the nature of the short-term rental operation. Contacting the Waitaki District Council directly is recommended to confirm the current requirements before proceeding with the change of use notification.

By ensuring all the necessary documentation is provided upfront, the change of use process is likely to be smoother and faster. This allows short-term rental operators to get up and running sooner while giving guests and the wider community confidence the accommodation is safe, compliant, and well-managed.

Oamaru Short-Term Rental Taxes

When operating a short-term rental business in Oamaru, it's important to be aware of the various taxes that may apply and to ensure you are meeting all your tax obligations. The main taxes to consider are income tax and Goods and Services Tax (GST).

Income Tax

Income earned from providing short-term rental accommodation in New Zealand is taxable and must be declared in an income tax return, either as part of your individual return or that of a company or partnership. The amount of tax you will pay depends on your total taxable income and the income tax rates that apply.

For the 2023 tax year, the income tax rates for individuals 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. Remaining income over $180,000 - 39%

Against your rental income, you can deduct expenses incurred in providing the accommodation, such as a portion of the mortgage interest, rates, insurance, utilities, cleaning, and supplies. If the property is used for both short-term rentals and private use, the expenses must be apportioned accordingly.

It's important to keep accurate records of all income and expenses relating to the rental activity to ensure you are claiming the correct deductions and paying the right amount of tax.

Goods and Services Tax (GST)

GST is a broad-based tax of 15% on most goods and services supplied in New Zealand, including short-term rental accommodation. If your annual turnover from taxable activities, including rental income, exceeds $60,000, you must register for GST.

Once registered, you must charge GST on your rental income and can claim back the GST on any expenses relating to the rental activity. You will need to file regular GST returns, usually every two months.

From 1 April 2024, under IRD's new GST marketplace rules, booking platforms like Airbnb and Bookabach will be required to collect and return GST on short-term rental accommodation, even if the host is not GST-registered.

For hosts who are not GST-registered, Airbnb will collect 15% GST from guests and pass on an 8.5% flat-rate credit to the host to cover the GST on their expenses. The remaining 6.5% will be remitted to IRD. Hosts will not be able to claim back any additional GST on their expenses.

GST-registered hosts will not receive the flat-rate credit. Airbnb will collect and return the 15% GST to IRD, and hosts will receive the rental income net of GST. They can continue claiming back the GST on their expenses as usual in their GST returns.

Deductions and Write-Offs

When calculating your taxable rental income, you can deduct expenses incurred in providing the accommodation. Common deductible expenses include:

1. Mortgage interest (subject to interest deductibility rules)
2. Rates and insurance
3. Utilities like power, gas, and Wi-Fi
4. Cleaning, laundry, and supplies
5. Repairs and maintenance
6. Marketing and advertising costs
7. Accounting and bookkeeping fees
8. Depreciation on chattels and appliances

If the property is used personally as well as for short-term rentals, the expenses must be apportioned based on the number of days used for each purpose. Detailed records should be kept to support expense claims.

Recent changes to interest deductibility and loss ring-fencing rules may impact the amount of deductions you can claim, so it's important to seek professional advice to ensure you are claiming the correct amounts.

By understanding the tax implications of providing short-term rental accommodation and putting good systems in place to track income and expenses, you can maximize the deductions you claim while ensuring you stay compliant with your tax obligations. Engaging an experienced accountant is recommended to provide guidance on your specific circumstances.

New Zealand Wide Short-Term Rental Rules

In addition to Oamaru-specific regulations, short-term rental operators need to be aware of national rules that apply across New Zealand. Here are the key things to know:

Goods and Services Tax (GST) Changes - "App Tax"

1. As of April 1, 2024, new GST rules nicknamed the "App Tax" will apply to short-term rentals booked through online platforms like Airbnb and Bookabach.
2. The online platform will be required to collect 15% GST on all bookings, regardless of the host's GST registration status.
3. For non-GST registered hosts, the platform will provide an 8.5% flat-rate credit of the GST collected. The remaining 6.5% is paid to the IRD.
4. GST-registered hosts will receive rental income net of GST and return it as a zero-rated supply. They can continue claiming GST on expenses.

Income Tax

1. All short-term rental income is taxable and must be declared, even if irregular.
2. Expenses like insurance, rates, repairs, interest, and fees can be deducted, but only for the portion of the year the property was rented.
3. If the property is used both personally and as a short-term rental, the "mixed-use asset" rules may apply.
4. If earning under $4,000 annually, the income does not need to be declared, but expenses cannot be claimed either.
5. The short-stay standard-cost method provides a fixed nightly rate to cover costs, with no tax on income up to that rate. Tax is paid on anything earned above the rate, with no deductions.

Other Rules and Resources

1. Short-term rentals are not covered under the Residential Tenancies Act, so specific short-term rental agreements are needed.
2. Councils may require short-term rentals to be registered and may have other regulations to follow.
3. Insurance, health and safety, and local rules around parking, noise, etc. also need to be considered.
4. Government resources are available to help determine which rules apply:
   1. Short-stay accommodation overview: Flowchart of which rules apply to different situations
   2. Short-stay standard-cost method: Eligibility criteria and how to apply it
   3. Sharing economy & short-term accommodation: Overview of tax obligations

While Oamaru has some specific requirements around resource and building consents for short-term rentals, Oamaru hosts must also comply with these New Zealand wide tax and regulatory obligations. The new "App Tax" GST rules taking effect in April 2024 will have a significant impact, so it's important for hosts to understand how they will apply to their situation.

Seeking professional tax advice is recommended to ensure Oamaru short-term rental operators are structured optimally and meeting all their national and local compliance requirements. By staying informed of the evolving regulatory landscape, hosts can avoid penalties and help ensure the long-term sustainability of their STR business.

Does Oamaru Strictly Enforce STR Rules?

Based on discussions in online real estate investing forums like Bigger Pockets and Reddit, the general consensus is that Oamaru does not currently have a robust system for enforcing short-term rental regulations, especially compared to larger New Zealand cities. Many hosts appear to be operating without the required permits and are not facing significant penalties.

One local Airbnb host on Reddit shared their experience: "I've been running my Oamaru Airbnb for over 2 years without any issues from the council. As long as you're being a responsible host and your guests aren't causing problems for neighbors, they seem to take a hands-off approach."

Another host on Bigger Pockets noted: "The council talks about the need for more regulation, but actual enforcement is pretty lax. I know several other hosts who aren't fully compliant with the building code rules for short-term rentals but haven't had any run-ins with officials. It seems to be complaint-driven."

However, this relaxed enforcement environment may be changing. In response to complaints from motel owners about unfair competition, the Waitaki District Council has indicated it will be reviewing its short-term rental policies as part of its District Plan update. Proposed changes include requiring Airbnbs to meet the same building and fire safety standards as traditional accommodations.

So while Oamaru is relatively Airbnb-friendly compared to cities with strict permit systems and proactive enforcement, the regulatory landscape is evolving. Hosts who are not fully compliant with the rules, even if they are currently flying under the radar, could face issues down the line if enforcement is stepped up.

The smart approach for Oamaru hosts is to ensure their short-term rental is properly registered with the council, meets all building and fire safety requirements, and is operated in a way that doesn't generate complaints from neighbors or competing businesses. By being proactive about compliance, hosts can hopefully continue to benefit from Oamaru's growing popularity as a tourist destination without facing a regulatory crackdown.

How to Start a Short-Term Rental Business in Oamaru

Starting a short-term rental business in Oamaru can be a profitable venture, but it's important to approach it strategically. Here are the key steps to get started:

1. Research local regulations: Before investing in a property, thoroughly review the Waitaki District Council's rules on short-term rentals. Understand any zoning restrictions, building code requirements, and the process for notifying the council of a change of use. Failing to comply can result in fines.
2. Identify your target market: Consider what type of guests you want to attract. Families, business travelers, and outdoor enthusiasts all have different needs and expectations. Understanding your ideal guest will guide your property choice, amenities, and marketing. Oamaru's Victorian heritage and growing popularity as a tourist destination make it appealing to a range of travelers.
3. Choose the right property: Look for a property that aligns with your target market and has the potential to generate strong returns. Consider factors like location, size, layout, and amenities. A property with character features or a unique design can help you stand out in the market. Keep in mind any renovations or upgrades needed to meet building code and guest expectations.
4. Create a business plan: Develop a comprehensive business plan that outlines your target market, pricing strategy, marketing approach, financial projections, and operational processes. This will provide a roadmap for launching and growing your business. Consider working with a business advisor or accountant to ensure your plan is thorough and realistic.
5. Register your business: Choose an appropriate business structure, such as a sole proprietorship or limited liability company, and register your business with the Companies Office. You'll also need an IRD number and may need to register for GST if you expect to earn over $60,000 annually. Consider engaging a lawyer or accountant to ensure you are setting up your business correctly.
6. Obtain necessary licenses and permits: Notify the Waitaki District Council of the change of use for your property by submitting a Notification of Proposed Change of Use form along with any required documentation. Depending on your property, you may also need building consent, resource consent, or a fire evacuation scheme approved by Fire and Emergency New Zealand.
7. Set up your listing: Choose a platform like Airbnb or Bookabach to list your property. Invest in high-quality photos and write a compelling description that highlights your property's unique features and location. Be transparent about your house rules, pricing, and any additional fees. Consider using a dynamic pricing tool to optimize your rates based on demand.
8. Automate your operations: Use vacation rental software to streamline tasks like booking management, guest communication, cleaning coordination, and financial tracking. This will save you time and ensure a seamless experience for your guests. Look for tools that integrate with your chosen booking platform and provide robust reporting capabilities.
9. Prioritize guest experience: Provide top-notch amenities, clear check-in instructions, and prompt communication to ensure your guests have a positive stay. Encourage guests to leave reviews and respond promptly to any feedback or concerns. Building a strong reputation will help you attract more bookings and command higher rates over time.
10. Stay informed and adapt: Keep up with changes in local regulations, tax laws, and market trends that could impact your business. Be prepared to adapt your strategy as needed to remain compliant and competitive. Consider joining a local short-term rental association or attending industry events to stay connected and informed.

By following these steps and seeking guidance from professional advisors when needed, you can launch a successful short-term rental business in Oamaru. While the regulatory environment may evolve in the coming years, the fundamentals of providing a quality guest experience and operating responsibly will remain key to long-term success in this market.

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

If you have questions about short-term rental regulations, zoning, building code requirements, or the process for registering your STR in Oamaru, here are the key contacts and resources:

Waitaki District Council

1. Phone: +64 3 433 0300
2. Email: service@waitaki.govt.nz
3. Address: 20 Thames Street, Private Bag 50058, Oamaru 9444
4. Website: https://www.waitaki.govt.nz/

The council's customer service team can direct you to the appropriate department for your inquiry, whether it's planning, building, rates, or infrastructure.

Duty Planner

Email: planners@waitaki.govt.nz

For specific questions about zoning, resource consents, and District Plan requirements for short-term rentals, you can email the council's duty planner for guidance.

Building Team

• Phone: +64 3 433 0300
• Email: building@waitaki.govt.nz

If you have questions about building code requirements, change of use notifications, or building consents for short-term rental properties, contact the council's building team.

In addition to these official contacts, connecting with other local STR hosts and property managers can be a valuable way to get insights and support. While there aren't any Oamaru-specific online communities, here are some other resources to check out:

• Oamaru Airbnb Hosts Facebook Group: This is a private group where local hosts can ask questions, share experiences, and stay up-to-date on STR trends and regulations in the area.
• New Zealand Airbnb Hosting Forum on Reddit: r/AirBnBHosting is a subreddit where Kiwi hosts from across the country discuss various aspects of STR operations and regulations.
• Host Q&A on Airbnb Community Center: https://community.withairbnb.com/t5/Hosting/ct-p/Hosting Airbnb's official community forum has a dedicated space for hosts to ask questions and connect with each other.
• Bigger Pockets New Zealand Forums: https://www.biggerpockets.com/forums/83-new-zealand This real estate investing forum has a section for New Zealand where STR regulations and market conditions are sometimes discussed.

By reaching out to these official contacts and tapping into the knowledge of the wider STR host community, you'll be well-equipped to navigate the regulatory landscape and operate a successful short-term rental business in Oamaru. Just remember to always verify any information or advice against the official rules and requirements.

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

To get a sense of how short-term rental operators in Oamaru feel about the current regulatory environment, here are some insights from discussions on Reddit and other online forums:

In a thread on the r/newzealand subreddit titled "Landlords vs NZ", one commenter noted that while there are over 660,000 rentals in New Zealand, the high cost of rent and increasing regulations are making it harder for "mum and dad investors" to get into the market. They expressed concerns that this could reduce the supply of long-term rentals.

On the Bigger Pockets forum, a post about short-term rental friendly cities on the Oregon Coast devolved into a discussion about the challenges of operating STRs in smaller towns. One host commented that "Oamaru is cracking down hard" and that "the council is really coming after Airbnb hosts." They advised others to be cautious about investing in STRs there without thoroughly researching the rules.

In a post on r/PersonalFinanceNZ asking for advice on renting out a property, several commenters debated whether it's better to use a property manager or self-manage from a distance. One person mentioned that their friend in Oamaru had issues with the council regarding their Airbnb and ended up selling the property due to the hassle of complying with the regulations.

A thread on r/newzealand comparing Whanganui, Masterton and Oamaru as potential places to move generated some discussion about the STR market in Oamaru. One commenter who recently relocated there said that while they love the town, their experience with the locals is that they are "quite insular" and resistant to change, which could make things challenging for Airbnb hosts.

While these anecdotes don't necessarily represent the views of all STR operators in Oamaru, they do suggest that the regulatory environment is a concern for many hosts. The sense is that the council is taking a stricter approach to enforcement and that complying with all the rules can be burdensome, especially for smaller, independent hosts.

As the town grapples with balancing the economic benefits of tourism with the need to protect housing affordability and community character, it will be important for hosts to stay engaged with the policy-making process. By sharing their experiences and perspectives with officials, they can help shape regulations that work for everyone.

At the same time, aspiring STR operators should do their due diligence before investing in Oamaru, as the regulatory landscape is likely to keep evolving. Connecting with experienced local hosts and joining online forums can provide valuable insights into the realities of running a short-term rental business in this unique and charming 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.