When you arrive in Queenstown for a weekend getaway, the breathtaking scenery of snow-capped mountains and serene lake waters welcomes you. Your journey from the airport to your holiday home is cashless, thanks to the app you've used to book the ride, with the fare billed directly to your credit card. Upon arrival, the holiday home app indicates that your house keys are ready in a lockbox, allowing you to quickly settle in.

However, amidst this idyllic setting, an important financial question arises: did you pay GST? Since 1 April 2024, services such as ride -sharing and short stay accommodation supplied through an online marketplace are subject to GST.  

This will be a change if you or your clients are operating ride shares or holiday homes through the platforms. Many Chartered Accountants Australia and New Zealand (CA ANZ) public practitioners have clients operating in the “sharing economy” – either as ride sharing operators or as short-term rental providers. The provider (driver, or property owner) will need to have provided their GST registration status and IRD number to the marketplace so that the marketplace can charge and collect GST.

For registered New Zealand providers, they are treated as making a zero-rated supply to the online marketplace and can otherwise continue to account for GST in the normal way. If a New Zealand property owner is not GST registered, the marketplace will manage the GST requirements and claim a flat-rate credit to approximate the GST that would have been claimable on expenses if the property owner had been registered. The marketplace will then pass the net amount onto the New Zealand property owner.

The process becomes more complex when a property manager or agent, acting as a ‘listing intermediary’ enters the picture. These managers often list properties on marketplace websites, meet guests, handle key exchanges, and manage any needs during their stay, including post-stay tasks like inspections and cleaning. Inland Revenue has recently released some practical information earlier this month about how to account for GST when there is a ‘listing intermediary’.   

In certain situations, the listing intermediary may wish to be responsible for GST on supplies of accommodation. Where that occurs, the listing intermediary will need to enter into an agreement with the marketplace to allow the listing intermediary to collect and pay the GST.

It is important to note that the listing intermediary cannot opt out of the marketplace rules because they are not the property owner. Only the host can opt out. This means that you, or your client, as property owner will need to check if your business, or your client’s business meets the opt out criteria.  

The listing intermediary also cannot group their hosts together to try and come within the opt out criteria.

The recently released guidance from Inland Revenue will be useful for many advisors and property owners, helping to ensure taxpayers comply. While having the listing intermediary creates additional complexity for GST, having a property manager is common, particularly in holiday hotspots like Queenstown.