Holiday-home owners face 'rich tax'

Aucklanders with holiday homes in the Coromandel could be stung by a "rich tax".

Tourism Coromandel is pushing for the local council to introduce a special rate for absentee landlords, as the region struggles to cope with its booming popularity.

Chief executive Jim Archibald said the region was struggling to upgrade services, with just 25,000 ratepayers, more than half of whom were absentee landlords.

"Absentee landlords just pay rates and spend a little when down here for a few weeks, but they also make thousands from renting out their homes during the year and that money never reaches the peninsula, it stays in Auckland."

Mr Archibald expects holiday-home owners will grizzle about the proposal but says the money could serve as an economic development fund for the region. "Besides, if they can afford to sit on a half-million-dollar property or more at the beach, they are not short of a bob or two."

Thames-Coromandel District Council communications manager Peter Hazael said demand had pushed up property prices to at least $300,000, with many in the $2 million to $3 million range.

But most residents did not have high incomes, with many reliant on superannuation or tourism, agriculture and fishing. Mr Hazael said the region was unable to cope when the population soared to 150,000 people in summer.

With towns such as Whitianga expected to double from 4000 to 9000 people in the next 15 years, its problems would get worse and the council was trying to work out how to pay for sewerage and water systems.

While the council was interested in the "rich tax" proposal, it might be too difficult to police, he said.

To boost finances, the council has already introduced a developers' levy which raises $2.5 million a year. It is also looking at private boat stacks, where owners would pay to leave their craft, in a bid to avoid building new marinas and reduce congestion in and around waterways. "The love affair with the Coromandel is not going to go away, so the council is seeking to manage development on a sustainable basis," said Mr Hazael.

"The rates won't come down as we don't have a lot of industry to help tosubsidise costs."

The Real Estate Institute of New Zealand said it was against a targeted rate for absentee landlords on the Coromandel. President Howard Morley said the proposal was "inequitable" as many of the holiday-home owners used their properties for only a few weeks a year. "They're not using as much in terms of infrastructure, waste, services and roads, so landing them with a special tax is unfair," he said.

- HERALD ON SUNDAY