Boarding Houses / Room by Room

[Bluekiwi]

How many rooms constitute a boarding house ?

And does any special rules come into play.

I am looking at room by room rental.

[Green Fish]

Loads of info on other threads, Blue Kiwi. Search for posts by Aston and others.

(PS - The reason why the due diligence clause, if any, is numbered "15" is because there are 14 clauses that precede it.)

[Bluekiwi]

Loads of info on other threads, Blue Kiwi. Search for posts by Aston and others.

(PS - The reason why the due diligence clause, if any, is numbered "15" is because there are 14 clauses that precede it.)

I thought I had banned you from answering that question.

You know you should add some helpful comments now and then on your posts Green Fish.

You did know there is no requirement for sarcasim in every post you make.

I heard it was just 50%

[Green Fish]

I noted the ban, and tried to abide by it, Blue Kiwi.

Sarcastic old gits just can't help themselves, I suppose.

[Bluekiwi]

I noted the ban, and tried to abide by it, Blue Kiwi.

Sarcastic old gits just can't help themselves, I suppose.

I value your wise comments Green fish and respect my elders.

I have a lot of respect for you Greenfish.

[IDO]

From my research, its not so much the number of rooms, but rather the length of the average stay.

id

[spurner]

No agency or person or government department can definitively say what constitutes a boarding house, and when GST becomes payable, it is a very grey area. I have recently received an IRD draft interpretation statement however, which is quite interesting. It is 521kb and I'm not sure how to post an attachment, so have justed copied an excerpt which may be relevant.

SUMMARY

[5] The supply of accommodation in a dwelling by way of hire, service occupancy agreement, or licence to occupy is an exempt supply under section 14(1)(c). The focus of the exemption is on the supply of accommodation in a “dwelling”.

Characteristics of dwellings

[6] The key characteristics of a dwelling are as follows.

• A dwelling is defined broadly and with increasing degrees of generality: buildings, premises, structure, or other part thereof.

• The definition is concerned with the functional aspects of the structure. Is the structure being predominantly used as a place for the supply of accommodation?

• A dwelling is not limited to someone’s home. Rather, a dwelling need only be a building, premises, structure, or other place for humans to live or abide in. Typically (but not exclusively) a house is such a place.

• The main function of the structure will be as a place of residence or abode.

• The words “of any individual” in the definition do not imply that a particular individual must be housed in the premises. Use by any individual will suffice.

• There is no requirement for any degree of permanency of occupation in order for particular premises to be held to be a residence or an abode.

• The concern is with the function of the building, premises, structure, or place rather than with any person who may occupy it. The issue is whether the main purpose or function of the structure in which accommodation is supplied is a place of residence or abode.

• Actual use may have ceased or may not have commenced. Further, a break in the use or period of inactivity will not prevent premises from being a dwelling.

• A commercial dwelling is excluded from the definition of “dwelling” so that the exemption in section 14(1)(c) does not apply to commercial dwellings.

Characteristics of commercial dwellings

[7] The definition of “commercial dwelling” in section 2 provides that the following are included within that term:

(a) any hotel, motel, inn, hostel, or boardinghouse; or

(b) any camping ground; or

(c) any convalescent home, nursing home, rest home, or hospice; or

(d) any establishment similar to any of the kinds referred to in paragraphs (a) to (c) of this definition.

[8] The listed commercial dwellings bear their ordinary meaning. However, to determine whether any establishment is similar to any of the kinds referred to in paragraphs (a)–(c), and therefore falls within paragraph (d), the following questions should be asked.

• Does the establishment have any of the characteristics possessed by the commercial dwellings listed in paragraphs (a)–(c)?

• Does the establishment lack any characteristics which are fundamental to the nature of the relevant listed establishments?

• Are any differences such that the establishment is different in kind, or are they differences which are little more than differences in degree?

[9] Some common general characteristics of those types of “commercial dwelling” listed in paragraphs (a)–(c) are:

• they are operated on a commercial basis, possessing the characteristics expected of a business supplying accommodation to the public, although they may be operated by a non-profit body;

• they provide accommodation to a number of people simultaneously (i.e. multiple units, rooms, or beds are available);

• accommodation is generally provided by way of a licence to occupy, not by a tenancy;

• a degree of control, is exercised by the owner/operator, generally varying with the level of service provided and the cost of the accommodation;

• servicing of the units, rooms, or common areas is usually provided as an aspect of the supply;

• the accommodation is furnished;

• there may be communal facilities available for the use of all guests;

• the guests are not part of the owner’s, or owner’s family’s, household during the stay;

• the guests receive professional, formal, or commercial hospitality.

[10] Some of the general differences between the listed kinds of establishments are the:

• degree to which the accommodation is self-contained;

• quality of furnishings provided;

• extent of services provided; and

• average duration of stays by guests.

[11] These general characteristics are a useful starting point, but determining whether an establishment is similar to any of the listed kinds will be a question of fact and degree in any particular case.

[Bluekiwi]

Okay....

Say 8 plus bedrooms, unfurnished with many common areas like study, computer room etc.

I would just consider this to be a room by room rental as I would envisage people renting rooms for long-term or one year leases.

[SuperDad]

BK,

That is what I run (8 bedroom, but furnished).

Tenants are on 12 month FT tenancies.

It is not a boarding house for GST, local council, or fire reg purposes.

Paul

[Bluekiwi]

Cheers FT tenancies sounds good, what are charging per week in Hamilton ?

I have heard 125 to 150 in Auckland but that sounds a bit far fetched, I would have thought 100 to 125 max.

[halfempty]

I've seen place's getting $220 to $260 per week in central Wellington.

[SuperDad]

Cheers FT tenancies sounds good, what are charging per week in Hamilton ?

I have heard 125 to 150 in Auckland but that sounds a bit far fetched, I would have thought 100 to 125 max.

I'm getting $100-$135pw, depending on room size.

Have you read this thread?

Paul.

[Bluekiwi]

Okay maybe being on bus route and not too far from Auckland City might bode well then.

[Bluekiwi]

I'm getting $100-$135pw, depending on room size.

Have you read this thread?

Paul.

I am part way through it, its a great thread.

And I came in early to work to catch up

One thing I am a little confused, there are references to your boarding house, but is classified as room by room leasing isnt it ?
ie. Its residential and not commercial.

p.s. Good idea doing the cleaning yourself at the start to get a feel for whats going on in the house

[SuperDad]

Yes it is residential, not commercial.

Knowing what I know now, I would say forget cleaning the place yourself, and get a commercial cleaner through every week or two.

Paul.