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Letting your Holiday House

Published: 30th November 2016

Author: Tim Sinclair, Mactodd

Published in: Fineprint | Issue #71

Make sure you know the rules

It’s becoming increasingly popular for many New Zealanders to let their holiday houses, or their main home, to short-term visitors. You may be facilitating this yourself, or you could be using a provider such as Airbnb or BookaBach that connects homeowners and visitors.

Whether you are currently letting your property for short-term visitor accommodation, or are considering doing so, we recommend that you give some thought to the following matters.

Council requirements

Your local council regulates short-term visitor accommodation activities, so it’s important to check its requirements; these can differ from council to council.

For smaller-scale or infrequent activities, you may only need to notify your local council of your activities.

If you are letting your house on a frequent basis, it’s more likely that resource consent will be required.

Do note that making your home available to family and/or friends at no charge, and letting your property long-term, are not activities regulated by your local council.

Contractual matters

If you engage a provider such as Airbnb to connect you with visitors, you should carefully check the terms of your contract. You need to be clear on your rights and obligations, as well as those of your provider.

Bank approval

Your bank may have a security interest in your property. If so, the terms of your mortgage documentation will specify certain activities for which the consent of the bank will be required. One of these potential activities may include the letting of your property for short-term visitor accommodation.

We strongly recommend that you check with your bank as to whether it’s happy with the letting of your property in such a manner. It’s unlikely that your bank will take issue with such a proposal, but it’s prudent to keep it informed.

Insurance

It’s always good practice to notify your insurer of your visitor accommodation activities. This will ensure that your insurance policy can be adjusted whilst your property is being let.

Health and Safety

If you engage other people to look after the maintenance of your holiday house, it’s likely that your holiday house will need to comply with the Health and Safety at Work Act 2015. As someone who is responsible for a ‘workplace’ you must take all practicable steps to ensure that no workplace hazard causes harm to ‘workers’ such as gardeners, cleaners and tradespeople.

This legislation is complex, and it’s likely you will need some help with understanding your obligations and responsibilities.

It’s also important for you identify those parts of your property that may pose a possible hazard to your visitors (such as swimming pools, fireplaces and balconies).

By taking practical steps to address any potential hazards, you can ensure that your visitors have a safe and enjoyable stay.

Tax

There are likely to be tax implications if you’re letting out your house. We recommend that you contact your accountant/financial adviser to discuss your tax situation.

The short-term letting of private homes as visitor accommodation can benefit both homeowners and visitors alike. It is, however, important that as homeowners you are aware of, and take steps in respect of, the types of obligations we have highlighted above. If you’re unsure, please get in touch with us well before your first visitors arrive.

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