Victoria to hit Airbnb and short-stay rental platforms with 7.5 per cent levy from 2025

Victoria to hit Airbnb and short-stay rental platforms with 7.5 per cent levy from 2025
  • PublishedSeptember 20, 2023

Victoria will begin taxing short-stay rental platforms such as Airbnb and Stayz from 2025, as part of a raft of housing measures announced by the state government.

Premier Daniel Andrews also announced sweeping reforms to wrest planning approvals from local government and rebuild the state’s ageing social housing blocks.

Mr Andrews made the announcements as part of Victoria’s housing statement, a policy document aimed at boosting housing supply.

The document notes that short-stay rental sites have become a “popular feature” of Victoria’s visitor economy, but they have reduced the availability of properties for longer-term use.

“In Victoria, there are more than 36,000 short-stay accommodation places — with almost half of these in regional Victoria. More than 29,000 of those places are entire homes,” the document states.

“These are places that cannot be used for longer-term accommodation or rented out on fixed-term agreements — so it makes sense that they should provide some benefit toward the places that can.”

The 7.5 per cent levy will apply to revenue from the platforms from January 1, 2025.

Mr Andrews said income from the levy would go towards Homes Victoria, to fund the construction of social and affordable housing.

The statewide levy on short-stay accommodation is the first in Australia, opening the possibility of other states following suit.

Airbnb says levy ‘too high’, calls for separate changes

Airbnb Australia and New Zealand public policy head Michael Crosby said while his company welcomed a policy to boost housing construction, the rate of 7.5 per cent was “too high” and would give hotels a “free kick”.

“A rate this high could have a negative impact on the appeal of Victoria as a tourism destination, also penalising everyday Victorians seeking a local holiday when many are already grappling with the cost of living,” he said.

“We believe a levy somewhere between 3-5 per cent which is in line with international policies, is appropriate.”

Mr Crosby also called for a statewide register of short-term rental properties, which is already in place in New South Wales and Tasmania, as well as a code of conduct that included penalties for misbehaving guests.

Tourism body warns ‘disastrous’ policy will harm regional businesses

Victoria Tourism Industry Council chief executive Felicia Mariani said the tax would be “disastrous” and a “significant impost” that would be worn by those travelling across regional Victoria.

“Let’s use an example of $400 per night, on an average day of three nights,” she said.

“Well that’s $1,200, a 7.5 per cent tax on that is a $90 fee. That is not an insignificant fee that we’re asking visitors to the state to pay.”

Tourists viewing and taking photos of the Twelve Apostles
Victoria’s peak tourism body has warned the policy may discourage people from overnight stays in regional areas.(ABC News: Jarrod Fankhauser)

Ms Mariani said she feared the increased costs would lead to fewer overnight stays in regional areas and less tourism spending as a result.

“Those destinations within two to two-and-a-half hours’ drive around Melbourne are probably going to be the worst-affected by this disastrous policy.”

The new levy would replace local council fees, such as an annual fee introduced by the Bass Coast Shire Council.

Premier insists charge ‘only fair’ to boost housing supply

Mr Andrews insisted the 7.5 per cent rate was “modest” and “every single dollar” would be spent maintaining and building affordable homes.

“Ultimately, there’s a place for short-stay, it’s very important, a lot of people use it and like it,” he said.

“We think it’s only fair that those platforms — whether it’s Stayz or Airbnb — have one framework to comply with, not one for every local government area across the state.

“So we will essentially extinguish local government’s ability to charge fees, we will do that, we think that gives certainty to that sector.”

On an overcast day, you view a large post-war modernist public housing tower with others seen on the horizon.
The government has pledged to replace all of Victoria’s social housing, including these towers in North Melbourne.(Supplied: Chris McLay)

The housing statement also outlines a plan to demolish and rebuild all 44 of Melbourne’s high-rise public housing estates by 2051.

Mr Andrews also said his government would work to clear a backlog of 1,400 housing permit applications that had been with local councils for more than six months.


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