Disclaimer: This article provides general information only and is not legal or tax advice. Requirements can vary by council, and personal circumstances differ. Please seek professional advice where needed.
Listing your bach as a holiday rental is one thing, but you also need to ensure that you are operating within the law, meeting health and safety standards, and a range of personal, legal and taxation obligations that you will need to understand and navigate.
It could feel a bit overwhelming at first glance, so we’ve put together an overview of the main aspects you need to consider before renting out your bach. It’s not an exhaustive list, but it will set you on the right path.
Our experience managing more than 2000 holiday homes nationwide means that our Bachcare experts are well-equipped to help you ensure that all the regulatory bases are covered.
Health & Safety
Under New Zealand legislation, an owner is responsible for ensuring that the holiday home and garden are free of any hazards that could cause an accident or injury. For a typical holiday home, this generally includes the following key requirements:
- Smoke alarms installed, with working batteries
- Fire extinguishers in place, up-to-date, with 3-monthly checks recommended
- Hazardous chemicals are stored safely in child-proof locations. E.g. rat bait, pool chemicals should be secured in high or locked cupboards.
- Managing pests, vermin, and hygiene risks
- Ensuring pools and spa pools are compliant and safe
- Decks or balconies more than 1m above ground must have a handrail at least 1m high
- Any boats or kayaks are seaworthy, with life jackets provided
- Repairing known hazards promptly and keeping basic maintenance records
- Ensuring walkways, decks, stairs, and balconies are well-maintained and free of slip and trip risks, such as wet areas, loose mats, and uneven surfaces
Negligence could be prosecuted under the New Zealand Health and Safety at Work Act 2015
Local authority rules and regulations
You will need to check local body rules, as these can vary between towns and regions. Key requirements may include:
- Some regions require resource consent for short-term rentals. Councils may apply thresholds (e.g., based on the number of nights per year a property is rented) to determine if consent is needed, and may also impose guest limits
- You may be liable to pay different or increased rates charges
- Properties within a body corporate, on a cross lease, or subject to a covenant may have specific rules for short-term rentals.
Rental agreements
A holiday rental is covered by consumer law rather than the act that relates to long-term tenancies. It’s, therefore, important that you have a rental agreement in place to cover both the owner and the renter.
- Residential Tenancies Act 1986: As a general rule, this legislation does not apply where a house is let for the tenant’s holiday purposes; therefore, a rental agreement must be in place to cover both the owner and the renter.
- A holiday rental is protected under the Consumer Guarantees Act: accommodation must be provided in a reasonable standard, fit for purpose, and clean.
- Creating a written agreement for a short-term rental to outline a fair use policy is paramount. This should cover all relevant conditions, from number of guests to payment, etc.
NZ GST & Income Tax
- Under the Income Tax Act 2007, holiday home and Airbnb rental income is taxable and must be included on your tax return. Find more info on IRD
- From 1 April 2024, online booking platforms must collect GST from guests on short-stay accommodation booked through them. If you’re not GST-registered, you may receive an 8.5% flat-rate credit.
- If your taxable activities (including rental income) are more than NZ$60,000 over a 12-month period, you must be registered for GST.
- Tax treatment can vary depending on your circumstances, so if you’re unsure, we recommend speaking with an accountant.