QLDC plans 1.8% rates increase - but relief for accommodation providers

May 21, 2020

From QLDC:

"COVID-19 has had a significant impact on Queenstown’s tourism economy, affecting everyone from seasonal workers to home owners.

As a result, many are facing tough financial challenges. Queenstown Lakes District Council (QLDC) has provided a range of programmes to help ease pressure on people across the district.

These include rent relief, broader options for rates payment instalments and Emergency Operations Centre welfare programmes. All are still available for residents who fit the relevant criteria.

As well as these, a comprehensive review of the 2020-2021 Annual Plan will look to limit rates increases to a minimum. Council fully acknowledges that the budgets supporting the draft Annual Plan, which was adopted on 12 March, need to be substantially reviewed in light of the deteriorating economic conditions resulting from the COVID-19 pandemic.

To this end, Council announced on 8 April that it was intending to proactively review alternative budget scenarios for the 2020-2021 Annual Plan (AP21). In particular, Council stated it would be looking to limit rates increases to a minimum. The Consultation Document (CD) that was approved on 12 March signalled an average rates increase of 6.76%. Council is now targeting a revised budget which reduces the average rates increase down closer to the current rate of inflation, which is 1.8%.

Limiting the rates increase to this degree will not be an easy task. A major budget issue for QLDC is that it has significant tourism-related revenue budgets which are now at risk; these include the Queenstown Airport Corporation dividend and turnover-based concessions, as well as tourism-related rental income from sources such as campgrounds and wharves. Much of this tourism-related revenue essentially reduces rates.

The revised budget has seen all these revenue forecasts reduce significantly, which means we have had to find significant additional savings and/or funding. The revised budget will be discussed by councillors next week as part of its consideration of Annual Plan submissions.

Visitor accommodation has been particularly affected by COVID-19. With far fewer tourists visiting the region, many houses that were previously used for visitor accommodation have now become long-term rentals instead or remain unrented.

This has had an impact on the rates owners of these properties need to pay. You can now apply for visitor accommodation rates relief if you own a property in this category and do not intend to use your property for visitor accommodation for the next 12 months; or, if you hold a 365 day visitor accommodation consent and are significantly reducing the amount of visitor accommodation use to fewer than 180 days per year.

Visitor accommodation rates relief will readjust rates for the rating year commencing on 1 July 2020. Rates will revert back to pre-COVID visitor accommodation rates in July 2021 unless Council is contacted prior to 30 June 2021.

Owners will be required to make a declaration that they are aware of obligations to pay rates and that the property will be used in the manner specified on the application form for the next 12 months.

There is no requirement to adjust resource consents to be eligible for the rates relief.

Please note: this is not available to Hotels, Motels, Commercial Timeshare Units, Managed Apartments and Motorcamps.

Applications must be made before 30 June 2020 to be eligible. The rates relief form can be found on QLDC’s website here: https://www.qldc.govt.nz/services/rates-property/rates-relief-for-visitor-accommodation

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