Renting Out A Holiday Home - Your Legal Requirements

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 that 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 2,000 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 to ensure that the holiday home and garden are free of any hazards that could cause an accident or injury, including pests and vermin. This includes the following:

Smoke alarms, installed, with working batteries.
Fire extinguishers in place, up-to-date, with 3-monthly checks recommended
Hazardous chemicals stored safely, in child-proof locations e.g. rat bait, pool chemicals should be secured in high or locked cupboards.
Swimming pools deeper than 400mm must be fenced.
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.
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 e.g. Queenstown-Lakes District Council requires providers of visitor accommodation to be registered. Other watch-outs include

Some regions require resource consent for short term rentals.
You may be liable to pay a 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.

Bachcare’s expert team can help you navigate all the finer details of regulations and rules that govern holiday home rentals.

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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 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 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.
If your taxable activities (including rental income) are more than NZ$60,000 over a 12-month period, you must be registered for GST.
To be eligible to claim costs related to the rental income, you must keep a record of these expenses.
Local or regional rates must be paid.
Ownership structure (i.e. individual, business or trust) has different implications for both income tax and GST.

Bachcare’s expert team can help you navigate all the finer details of regulations and rules that govern holiday home rentals