The Dunedin City Council is to consider proposals to ease the rates burden faced by Dunedin bed and breakfast operators, which could help ensure the survival of some of the city's most upmarket heritage properties.
Councillors will next week consider establishing a new heritage B&B rates category and a separate rates relief fund - beginning with $20,000 allocated for the 2011-12 financial year - for heritage houses that did not qualify for the new rates category.
Both ideas were suggested by the council's rates and funding working party, chaired by deputy mayor Chris Staynes, and would be considered at the next full council meeting on Tuesday.
The moves follow howls of outrage after five heritage B&B property owners were reclassified as non-residential operations - meaning commercial - by Quotable Value staff last year.
The change meant they were required to pay higher non-residential council rates, in some cases tripling their rates bills.
The extra cost prompted three B&Bs to close their doors, while others reduced the scale of their operations to avoid the extra charges.
Cr Staynes said yesterday the process had been "quite a difficult path", but he was confident the two initiatives would help ease the financial pressure on heritage property owners.
The new rates category would mean owners contributed more, but avoided full commercial rates, and was recognition they were running part-time businesses from properties that doubled as their homes, he said.
The rates relief fund would mean the wide variety of heritage properties being used for part-time B&B businesses would be provided for, he said.
The lost rates revenue would be "immaterial", but the changes would "hopefully keep these places there for the future and being part of the fabric [of the city]," he said.
"Dunedin is a heritage city, so these properties that are in that heritage category are actually part of what we're selling Dunedin on."
If approved, the new heritage B&B category would apply to properties operating as B&Bs with four or more bedrooms classified as non-residential properties for rating purposes, a report by council financial planner Carolyn Howard said.
The properties would need to fit certain criteria to establish their heritage value, with the majority of the property having to be at least 80 years old, registered by the New Zealand Historic Places Trust, or listed by the council as a protected heritage building.
The B&B owner must also live at the property, the rules stated.
Properties that qualified would be charged 1.75 times the residential rate, but residential rates for community services, drainage and kerbside collection services, among other changes.
The new rate would replace an earlier proposal for a transitional rate, suggested last year to help the B&Bs switch to commercial rates.
At the same time, the new rates relief fund would be available for owners of heritage houses that did not qualify for the new rate, with applications assessed on a case-by-case basis, a separate council report said.
Fletcher Lodge owner Keith Rozecki-Pollard - a vocal critic of switching B&Bs to non-residential rates - said when contacted yesterday he supported the council's efforts as "more than a step in the right direction".
However, he warned the word "residential" was important to his B&B's residential status, and losing it would have knock-on effects for mortgage and insurance payments.
He was happy to pay higher council rates, but urged the council to retain the word "residential" in whatever name it gave to the new rating category.
"We've said all along that we can support a move towards paying more rates ... I don't care what they call us, as long as it retains 'residential'."
Cr Staynes said that at next week's council meeting he would suggest adding the word "residential" to the name.
The proposal
• New heritage B&B rates category for properties that meet criteria.
• Separate rates relief available for owners whose properties do not qualify for heritage B&B rates, if they meet criteria.
• Intended to promote economic reuse of heritage buildings and help ensure their survival.
