Views divided on short stay levy

THE Short Stay Levy Bill has been introduced into Victorian Parliament and there has been a mixed response to its potential outcomes.

The legislation will introduce a 7.5 per cent levy on accommodation bookings of less than 28 days, including those made through platforms such as Airbnb and Stayz, from January 1, 2025.

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

When a homeowner goes on holiday and someone else stays there temporarily, the levy does not apply.

Commercial accommodation such as hotels, motels and caravan parks are also exempt.

Minister for Housing Harriet Shing said the demand for housing statewide had never been greater, sparking the need for action.

“The Victorian short stay levy will support the delivery of more social housing and encourage more people to use their properties for permanent rental accommodation across the state.”

As a holiday destination, the Surf Coast Shire has a relatively high proportion of houses used as short-term rentals.

About 10 per cent of the municipality’s total private dwellings are listed on Airbnb, with the proportion rising to as high as 24 per cent in Lorne.

The Surf Coast Shire has welcomed the new bill, stating the short-term stay market was tearing at the social fabric and economic prosperity of the municipality’s communities.

“All revenue will go to building and maintaining much needed social and affordable homes,” shire mayor Liz

Pattison said.

“The announcement aligns with our Council Plan strategy to improve access to affordable residential accommodation and also responds to our advocacy work in this space.

“We look forward to receiving further details on councils having power to regulate short stay accommodation, and exploring how any proposed changes might be introduced.”

However, there are fears the change will have adverse effects on tourism and accommodation, particularly on the Great Ocean Road.

Surf Coast Rentals owner Daniel Aitken said the new tax was a “huge concern” and another hurdle for regional businesses.

“After the Commonwealth Games fiasco, and then this, everything the government seems to be doing is making things a lot harder for regional businesses.

“Especially in a place like Torquay, with the lack of commercial accommodation, we are so dependent on holiday houses.

“It has a real potential to negatively affect the tourism industry.

“If you overprice, no one comes and when they do, they won’t spend it the same way to support other businesses.”

Tourism Greater Geelong & The Bellarine executive director Tracey Carter echoed this sentiment.

“Generally, the tourism sector is concerned that the tax will be passed on to consumers, ultimately making regions in Victoria less competitive,” she said.

“And in many coastal areas where commercial accommodation stock is low, short stay options are an important part of the accommodation mix.”

Polwarth Liberal MP Richard Riordan said the new levy would mean the cost of accommodation would surge well above the inflation rate.

“The state government has given no guarantees that our coastal communities will see any benefit from this big new holiday tax.

“A new tax on accommodation and holidays will never solve a problem, it will only create an incentive for holiday makers to cross the border and go elsewhere.

“Increased land tax and now short-term holiday taxes only serve to scare people from the Great Ocean Road and supercharge low-value day visits over multi day stay tourism.”

Transitional arrangements will be in place, and the levy will not apply to bookings made before January 1, 2025.

More details on how the changes will apply are expected to be announced soon.