Motels hope a new Coromandel bach tax will create a more level playing field between accommodation providers.

Thames Coromandel District Council is proposing a$200 annual fee for home owners who rent out holiday homes.

Motel Association chief executive Michael Baines says they don't currently face the same costs and rules as commercial providers.

"They don't pay the same rates, they don't pay for their water and they get their rubbish taken away," he says.

"They pay domestic power and domestic telephone."

Michael Baines says other councils might consider a similar charge, to reflect the fees that commercial providers have to pay.

"The internet has allowed these properties to market themselves in direct competition but they're operating on a totally different cost structure."

Council's justification

The council says the fee would also apply to bred and breakfasts, and would bring private accommodation provider in line with other commercial providers.

Yesterday, council chief executive David Hammond told Larry Williams the money would go towards economic development.

"The peninsula has quite a big economic development programme, which includes new walkways, cycleways and capturing lots of international events in this area."

He said commercial accommodation providers have been complaining about the inequity in rates and regulations for several years.

"A massive part of the Coromandel accommodation sector which markets itself for profit is just not paying these costs."