Fletcher Lodge owner Keith Rozecki-Pollard was among four Dunedin B&B owners who earlier this year learned the council planned to charge them commercial, rather than residential, rates - in some cases tripling their annual bill.
The move followed a new assessment of the four B&Bs by Quotable Value staff, as valuation agents for the council, who deemed the properties to be predominantly commercial operations.
Following objections from the four owners at last month's annual plan hearings, the council agreed to consider a possible phase-in of the change, as well as other ways to ease the blow.
QV staff were sent back to the properties, but reiterated their assessments, and on Monday the council decided against a phase-in, meaning the four would pay commercial rates from July 1 this year.
Yesterday, Mr Rozecki-Pollard said the decision came as "absolutely no surprise", but warned the fight was not yet over.
He planned to complain to the Ministry of Justice's Land Valuation Tribunal, which could consider objections to property valuations, in an effort to have the change overturned.
He would also complain to the Office of the Ombudsmen, claiming written requests for information had been ignored by council staff - a claim disputed by council staff contacted yesterday.
Mr Rozecki-Pollard said QV and council staff had been unable to explain why his B&B had suddenly been switched to commercial rates after operating under residential rates for eight years.
He insisted his B&B regularly closed to guests for six months each year, and his lodge also doubled as his family home.
"Come up with any form of mathematics that says that's more than 50% [commercial use].
I'm at a loss."
His concerns were echoed by Lisburn House co-owner Alan Johnston, who said the decision had "stuffed us all".
Mr Johnston ran a three-bedroom B&B, together with a five-table restaurant, but feared he would have to close the restaurant to have any hope of being reclassified as residential.
He and wife, Olivia Richmond-Johnston, together made a $14,000 profit from the B&B, but "they just took another $5000-$6000 off me", he said.
Both men also claimed it was unfair some councillors or their partners were able to pay residential rates while running businesses from home, while the B&Bs were switched to commercial rates.
However, Cr Chris Staynes, chairman of the council's rates and funding working party, said he was confident the four B&Bs were commercial entities, having operated as such "for a long time now".
QV staff were the "experts" and stuck by their assessment, Cr Staynes said.
"If I was embarrassed, it would be because the city hadn't picked these ones up before now."
He acknowledged more warning about potential implications could have been offered to Lisburn House, after Mr Johnston and his wife applied for resource consent for a commercial kitchen, and that would be considered in future.
However, he doubted claims Fletcher Lodge opened only six months each year, and rejected comparisons with councillors - including himself - conducting non-council business from offices at home.
"In my case, I have one room in my house that's my office. In square footage of the house, it may be 10% of the house - so it's not predominant use."
He was not aware claims requests for information had gone unanswered, but said a complaint to the Land Valuation Tribunal was Mr Rozecki-Pollard's right.
The council's 2010-11 annual plan would be adopted later this month, after which the working party would identify changes to provide more information to property owners about triggers for a reclassification, and more warning to those reclassified.
