A recent MBIE determination has highlighted an issue that many Airbnb hosts, property investors and prospective purchasers may not have considered. In Determination 2026/026, MBIE confirmed that the use of a residential apartment for short-term visitor accommodation amounted to a change of use under the Building Act 2004.
The decision is likely to attract significant attention from councils and investors alike, particularly as short-term accommodation continues to grow in popularity across New Zealand.
What is an MBIE Determination?
MBIE determinations are legally binding decisions made under the Building Act to resolve disputes about how building legislation applies in specific circumstances. While a determination is binding on the parties involved, it is also highly persuasive and often relied on by councils, building professionals and property owners when considering similar situations.
For that reason, determinations can provide a useful indication of how MBIE and local authorities are likely to approach future disputes.
The Christchurch Airbnb Decision (2026/026)
The determination involved a one-bedroom apartment in Christchurch that had been consented as part of a multi-unit residential development. The owners made the apartment available for short-term guest accommodation through online booking platforms and accepted nightly bookings from the public.
Christchurch City Council considered that the property was no longer being used as a residential apartment and that its use had changed from residential occupation to visitor accommodation. The Council issued a Notice to Fix on the basis that the owners had not notified the council of the change of use or obtained the approvals required under the Building Act.
The owners argued that the apartment remained a self-contained dwelling and that only one group could occupy it at a time. MBIE disagreed. It found that the critical issue was not the physical layout of the apartment, but how it was actually being used. Because the apartment was being occupied by successive paying guests rather than serving as the home or residence of a household, MBIE concluded that its use had changed.
Why The Decision Matters
Perhaps the most important aspect of the determination is MBIE’s focus on the nature of the occupation rather than the physical characteristics of the property.
The apartment remained physically unchanged. It still contained a kitchen, bathroom, laundry and all the features commonly associated with residential living. However, MBIE concluded that the repeated provision of short-term accommodation meant the apartment was no longer functioning as a residential dwelling for Building Act purposes.
MBIE determined that the property’s classification had changed from a “Multi-unit dwelling” to “Community service” accommodation, triggering the change of use provisions under the Building Act. That distinction matters because different classifications can trigger additional Building Code requirements. In this case, both the Council and MBIE identified accessibility requirements for accommodation available to the public as one example of a potentially more onerous requirement associated with the new classification.
Importantly, MBIE did not consider whether any specific building upgrades or works were required. The issue before MBIE was much narrower: whether the use of the apartment as short-term accommodation constituted a change of use under the Building Act, and whether Christchurch City Council was justified in issuing a Notice to Fix. MBIE concluded that it was.
The Notice to Fix was issued because the owners had commenced the new use without first going through the statutory change of use process. The Notice to Fix did not identify any particular upgrades that were needed, nor did it direct the owners to undertake specific building works. Instead, it required the owners either to apply to the Council for approval of the change of use or cease using the apartment for short-term accommodation and return it to residential use. If the owners pursue the change of use process, the Council will need to assess whether the apartment, in its new classification as visitor accommodation, complies with the Building Code to the extent required by the Building Act. That assessment may identify additional requirements relating to matters such as accessibility, fire safety or other code provisions, but whether any works are necessary remains a separate question that was not decided by MBIE.
For investors and Airbnb operators, the key takeaway is that the determination is not authority for the proposition that every short-term rental requires expensive upgrades. Rather, it confirms that if a council considers a change of use has occurred, owners may be required to engage with the change of use process before the council determines whether any further compliance measures are necessary.
Is This A Change To The Law?
While Determination 2026/026 has attracted considerable attention, it is important to recognise that it does not represent a change in the law. The Building Act’s change of use provisions have existed for many years and councils have long had the ability to assess whether a building’s actual use differs from its approved use. What makes this determination noteworthy is MBIE’s application of those established principles to a modern Airbnb-style apartment operating model. Although the determination does not change the law, it is one of the clearest statements to date that an apartment used as ongoing Airbnb-style accommodation may be viewed as having undergone a change of use under the Building Act.
The determination also builds on earlier authority, particularly the Wanaka Gym decisions, which were issued by the District Court in 2008 and subsequently considered by the High Court in The Wanaka Gym Limited v Queenstown Lakes District Council [2013] NZHC 2662. In those cases, the courts observed that whether a building is occupied as a “household” is a question of fact and degree, with relevant considerations including the permanence of occupation and the relationship between occupants. MBIE relied on that reasoning in concluding that a revolving series of short-term guests lacked the degree of permanence usually associated with residential occupation.
Although every Airbnb property will turn on its own facts, the determination signals that councils and MBIE may place increasing emphasis on how a property is actually occupied, rather than simply how it was designed or originally consented. For apartment owners and investors, that focus may have important compliance consequences.
The full determination can be accessed on MBIE’s website here.
What Should Property Investors Consider?
For those purchasing a property with the intention of operating an Airbnb or other short-term accommodation business, the determination serves as a timely reminder that due diligence should extend beyond rental returns and occupancy forecasts.
Investors should consider whether the property’s consented use aligns with the intended short-term accommodation use, whether there are any body corporate restrictions on short-stay letting, and whether the proposed use could trigger a change of use assessment by the relevant council.
Particular care may be required when purchasing apartments and units within larger residential developments. As this determination demonstrates, a property that is lawfully consented as a residential apartment may not automatically be suitable for commercial short-term accommodation without further regulatory consideration.
In many transactions, these issues can be investigated as part of the due diligence process through review of council records, consent documentation, body corporate rules and LIM information. Obtaining advice before committing to a purchase may be considerably cheaper than discovering compliance issues after settlement.
The implications of a change of use may also extend beyond Building Act compliance. While MBIE’s determination did not address rates, taxation or planning issues, owners should be aware that operating a property as short-term accommodation may have consequences in other regulatory areas. Depending on the relevant council’s rating policies, the use of a property as visitor accommodation may affect how the property is assessed or categorised for rating purposes. Prospective purchasers should therefore consider obtaining advice not only on building compliance, but also on rates, planning and tax implications before acquiring a property for Airbnb use.
A common misconception is that owners can determine whether a change of use has occurred simply by considering the property’s current use. In reality, the assessment requires a comparison between the building’s existing lawful use and the proposed use. The starting point is identifying the property’s consented use by reviewing the building consent, code compliance certificate, approved plans and council property file. For older buildings, this can be challenging and may require a review of historic council records, consent documentation and the building’s history. Once the existing use has been identified, it can be compared with the proposed Airbnb or short-term accommodation use. Where there is any doubt, owners should seek advice and engage with the council before commencing operations. As Determination 2026/026 demonstrates, a property that is physically suitable for residential occupation may nevertheless be regarded as having undergone a change of use if it is operated as ongoing visitor accommodation.
A Reminder For Existing Airbnb Owners
The determination does not mean every Airbnb property in New Zealand has undergone a change of use. Each property will need to be assessed on its own facts and circumstances. However, the decision clearly signals that councils may take a closer look at short-term accommodation where a property is no longer being used as a home or residence and is instead being operated as transient accommodation for paying guests.
Owners considering Airbnb use, or purchasers looking at a potential Airbnb investment, should obtain advice early to understand whether Building Act requirements may apply.
Conclusion
Determination 2026/026 is an important reminder that Airbnb and short-term accommodation can raise issues that go beyond planning rules and body corporate restrictions. The Building Act focuses not only on what a property looks like, but also on how it is used. Where that use changes from residential occupation to visitor accommodation, additional compliance obligations may arise.
For investors, identifying those issues before purchase may be just as important as identifying the property’s earning potential.
As councils increasingly scrutinise short-term accommodation, investors should treat Building Act compliance as a core part of their due diligence when acquiring or operating Airbnb properties.
Whether a particular property has undergone a change of use will depend on its specific circumstances, and owners should obtain legal and building compliance advice before commencing or purchasing a short-term accommodation operation.
