Coromandel's "bach tax" scrap is back on with B&B owners calling out the council for handing them "diabolical" rates increases that holiday home owners will escape.

But the council says bach owners are next on the list, and keeping everyone happy is impossible.

Earlier this year Thames-Coromandel District Council came under fire for a proposal that would see bach owners who rented their properties pay a flat fee of $200.

Around 60 per cent of the council's ratepayers are absentee home owners, and the council says those who run short-term accommodation operations are making money off its services without paying for the extra use.

Bach owners shot back saying most of the year the homes were empty, meaning the rates they already paid were more than enough. The proposal was abandoned in May due to public backlash.

Now B&B owners are entering the fray, after some received rates bills this week almost double what they would usually pay.

B&B owner Paul Hopkins, who operates Mussel Bed B&B at Cooks Beach, says his bill is up from $2800 to $5000 - and it's all because he has more than four bedrooms on his books.

"I'm very pissed off, I can tell you that," he says.

While he knew a proposal was on the table to charge four-bedroomed operations as commercial entities, he wasn't informed the proposal had been advanced.

Now, he pays the much higher commercial waste water rates, and says it is "diabolical" that council is singling out B&Bs, without touching holiday home owners who may be running operations just as big as his.

"All they're doing is picking the lowest fruit off the tree, that's easiest to find, and targeting those people," he says.

"I class it as discrimination, and it is discrimation because they're singling out one group as against others."

Bed and Breakfast Association of New Zealand President Kathryn Officer says she knows of about 50 B&Bs in the Coromandel, roughly half of whom are members. Those who have contacted her are facing rates hikes of between $800 and $1500 and didn't know the charges were coming.

She says the charges may force some to close, adding "there are better and fairer ways...council could have done this."

But TCDC Mayor, Glenn Leach, says the changes were well signalled as were consultations. He knew of 26 B&Bs impacted by the change, some of whom who see their rates decrease - in one case by $3000.

As for the claim of discrimination, he points out that despite using commercial waste water links in some cases, B&B owners have just paid the usual residential fee. That means private residents have been picking up the tab for them.

"It could be argued that those B&Bs...have been getting a pretty good run for a hell of a long time," he says.

Leach adds that charges are on the way for holiday home owners, with the possibility of a charge "at the point of booking" being discussed.

In the meantime, Leach accepts things may look a bit unfair. But he says it's a complex issue for councils like his, and "we're quietly trying to fix the thing, and trying to find some equity."

- Stuff