New tax to boost long-term rental availability

THE long-term rental squeeze in Victoria could be somewhat eased with the announcement of the Short Stay Levy Bill 2024, which introduces a seven-point-five per cent tax from 1 January 2025 on short stay accommodation bookings of less than twenty-eight days, including those made through platforms such as Airbnb and Stayz.

All revenue from the levy, which is expected to raise approximately $60 million per year, will be passed on to Homes Victoria to support the building and maintenance of social and affordable housing, with 25 per cent of these funds to be invested in regional Victoria.

There’s about 63,000 short stay accommodation places in Victoria, with nearly half of these regional. Almost 50,000 of these are entire homes suitable for long-term rental.

The levy will not apply to a homeowner leasing out all or part of their principal place of residence for a short stay.

The new legislation will also give owners’ corporations the choice to ban short stays in their developments if approved by 75 per cent of owners, and changes to the planning system will give local councils additional powers as well.

State Treasurer Tim Pallas said the move will unlock more homes for real rentals and provide more funding for social housing.

“This is an important step towards making more properties available for long-term rental – and we’ve consulted with the sector to make sure we’ve got the balance right,” he said.

Despite Mr Pallas’ claims, the Victoria Tourism Industry Council expressed its frustration at the actual lack of engagement with industry.

“(We are) imploring government to consult with us, engage with us, and then we can create and implement systems that work for all and achieve the outcome government is looking for, without destroying an industry in the process,” VTIC CEO Felicia Mariani said.