Understanding the New ‘App Tax’: What Property Owners in New Zealand Need to Know for 2024

App Tax

There have been some changes if you own and rent out a room in your home, your bach or an investment property in New Zealand (on a short term basis) booked on or after 1st April 2024.

On this date the New Zealand Government implemented a new tax commonly referred to as the “App Tax”.  

The effect of this is that your platform provider (Booking.com, Airbnb, Expedia, or your property manager etc) needs to collect and pay 15% GST on your accommodation and other income before they pay you.

If you are GST Registered

Your platform provider will now pay you your rental and other income less 15% GST.

If you are GST-registered and have been paying GST on accommodation through your own GST returns, you will need to stop this as your platform provider will now be doing this for you.

If you are not GST Registered

The 15% GST collected by the platform provider will be split between the Inland Revenue Department (IRD) and yourself as the property owner.

Your platform provider will claim and pay you the 8.5% App Tax Rebate from the IRD.

This means that if you do not adjust your pricing you will in effect receive 6.5% less that you would before 1st April 2024. 

This is not avoidable unless you register for GST.

What do you need to do?

Please carefully read any instructions that have been provided to you from your various booking platforms (or check with them if you are unsure) to ensure you:

1. Provide them with your New Zealand GST number (if any) – note some providers may call this VAT inline with other countries (Value Added Tax)
2. Are correctly communicating your expected GST exclusive pricing to them to avoid surprises
3. To learn more about this, please visit The Sharing Economy on the IRD website, and we recommend you contact your accountant.
4. If your GST registration status changes, please ensure you communicate this to all platform providers as soon as possible. If you become GST registered and you don’t let them know right away, you may receive a flat-rate credit that you are not entitled to, and this could lead to penalties and adjustments in your GST return. 

Opting out

If you are a non-individual who is GST-registered and make (or expect to make) more than NZD 500,000 of taxable supplies in a 12-month period, you can opt out to be exempted from these rules and will remain responsible for your GST obligations. 

To learn more about this, please visit Who can opt out? on the IRD website, and we recommend you contact your accountant. 

Listing Agents / Properties under Management

If you work with a listing agent or property management company who lists your property on any platforms, please contact them to make sure you both understand these new GST rules and what they mean for you. 

Property Managers

Property Managers and listing agents may now be classified as a platform provider, meaning you may be responsible for the collection and payment of GST and will need to manage the flat-rate credits for the properties you list/manage.

To learn more about this, please visit Property managers and agents – listing intermediary rules on the IRD website, and we recommend that you talk to your accountant.