Council’s secret weapon in war on Airbnb cheats


Earlier this month, the council estimated there were 8300 Airbnb properties in Auckland, with 3800 liable for the bed tax (hosts are exempt if they rent out their property for fewer than 28 days per year) – of whom 1285 had been identified.

Airbnb told the Herald yesterday – revealing its numbers for the first time – that it in fact had 11,300 active listings in Auckland, with more than half or 5650 taking bookings of 33 nights a year or more, making them liable for the new tax, which kicked in last August and can double or triple a rates bill.

Currently, council staff are manually trawling through listings on online accommodation sites, and phoning hosts.

But the process is slow and tricky given the new tax is based on a number of variables including how many nights are booked. Plus, new Airbnb hosts are appearing all the time. Current hosts can hop between letting part or whole of their house, or jump between services.

How to keep tabs on things? Enter Reuben Schwarz, co-founder of BnbGuard, billed as Australasia’s first service for monitoring online Airbnb listings for unauthorised subletting.

Schwarz, a one-time, data-cruncher for a Wellington-based news site, formed BnBGuard in late 2017 for the benefit of landlords.

Based in Sydney by that point, Schwarz and co-founder Richard Frey had noticed a sharp rise in stories about properties being trashed by Airbnb guests – with the twist that tenants were often listing a property on the service without landlord’s knowledge.

Renters would go out of town for a long weekend, then list their landlord’s property on Airbnb on the sly, pocketing some bonus income. Schwarz notes that any damage caused in that circumstance is usually not covered by insurance. And even when there’s not damage, neighbours often get annoyed by parties, and there’s added security risk as copies of keys are distributed during the illegal subletting.

The service has been a hit. In its first year, it’s signed on more than 5000 customers, Schwarz says (and certainly, it’s become an Australian business media darling in the process). It covers Australia and New Zealand, but almost all clients are on the other side of the Tasman.

It’s also branched out from individual customers to mainly catering to apartment blocks and complexes, plus various councils as they make various attempts to tax Airbnb and other online accommodation-sharing services.

In this area of the market, you could say BnbGuard moves from being property owners’ friend to foe as it helps local bodies identify everyone liable for a tourism tax, then keep things up-to-date in real-time.

A Sunshine Coast tourism town is BnbGuard’s hero local government customer.

“We have a pilot programme with Noosa Shire Council for past six months, identifying the actual addresses of properties listed for short-term rentals. We are monitoring local and international sites for existing and new listings,” Schwarz says.

“Noosa charges a tourism levy on all properties used for short-term rental, which is based on a percentage of the property’s rateable value. They want to make sure people who should be paying the levy really are.”

BnbGuard co-founder Reuben Schwarz says his company is helping four Australian councils crackdown on Airbnb hosts who evade tourism taxes. Two NZ councils are close to signing up. Photo / Supplied.
BnbGuard co-founder Reuben Schwarz says his company is helping four Australian councils crackdown on Airbnb hosts who evade tourism taxes. Two NZ councils are close to signing up. Photo / Supplied.

The successful pilot in Queensland, plus work with three other councils, helped BnbGuard open what Schwarz calls “mid-stage” talks with four councils on this side of the ditch – two in the South Island and two in the North Island.

“Two have expressed strong interest in a pilot of our software to find properties that are not paying the correct tax so I’m hoping I can say more about those in a month or two,” he says.

Schwarz won’t name who he’s in negotiations with, but the largest target is pretty clear. Auckland Council acting head of rates valuations & data management Rhonwen Heath says BnbGuard is an option but that it has yet to make any commitment.