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Australia: The state executive government of Victoria is set to grant local councils the power to limit short-term rentals by imposing a 7.5 per cent levy on STR bookings from 1 January 2025.
The levy announced the Allan Labour government, led by Premier Jacinta Allan, will be a first of its kind in Australia. It will apply to properties listed on platforms such as Airbnb and Stayz [part of Expedia Group] for stays under 28 days, as well as the redevelopment of 44 monolithic public housing towers that were built after the Second World War, but will not include properties that are the primary residence of a property owner, as well as hotel, motels and caravan parks.
Treasurer Tim Pallas believes that the incoming legislation will help in “getting the balance right” in Victoria’s housing landscape, with an estimated 50,000 short-term rentals currently listed in the state. While the government previously planned to raise around $70 million a year from the levy, Pallas admitted that that figure had since been revised down to an estimated $60 million a year – 25 per cent of which will be re-invested in regional Victoria.
Further regulations could include issuing permits or limiting the number of nights that a property can be rented out on a short-term rental basis in the state.
Michael Crosby, head of public policy at Airbnb Australia and New Zealand, told The Guardian that the Victoria government had contradicted its “clear pledge to create one simple framework for the short-stay accommodation sector”. Airbnb previously called for a smaller tax of three to five per cent on all accommodation providers that would be paid for by the guest at the time of booking and would go towards affordable housing initiatives.
Eacham Curry, senior director for government and corporate affairs at Stayz, told the same publication that the changes would “undermine the original purpose of the levy; to raise money for social housing initiatives, and risk creating bureaucratic complexity that will drive away tourism dollars”.
In response, The Australian & New Zealand Short Term Rental Association [ASTRA] released the following statement to its members: “The introduction of a 7.5 per cent levy in lieu of nightly caps had been previously discussed with stakeholders. However, the implications for owners in apartment buildings, and the troubling possibility of local councils adding yet another layer of regulation, were not previously considered.
“This decision has raised several compliance issues, and the timeline for implementation by January 1st, 2025, seems highly unrealistic.
“ASTRA has been working closely with other key industry stakeholders, including the OTAs [Airbnb, Expedia, Booking] and the Victorian Tourism Industry Council, to ensure a united front in addressing these challenging new measures. We will keep you informed of any developments and further announcements,” it added.
The Short Term Accommodation Association Australia [STAAA] criticised the Allan Labour government for “failing to adequately consult with key stakeholders in the short-term rental industry” before introducing the Short Stay Levy Bill 2024 into parliament.
Last August, the City of Melbourne [Victoria’s state capital] approved new regulations in principle for short-term rentals, including introducing registration fees of up to $350 a year and a mandatory 180-day renting cap. At the time, it was suggested that the regulations would not come into effect until at least February 2024, although the reforms were paused after the Victorian government unveiled its plans for a state-wide levy in its housing statement.
Unlike in many other cities around the world, Melbourne currently has no limit on the number of nights a property can be rented out for on a short-term basis, nor is there a requirement for a planning permit.
