Victoria To Impose A 7.5% Levy On Airbnb And Short-stay Rental Platforms Starting In 2025.

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

Premier Daniel Andrews also unveiled significant reforms to transfer planning approvals from local government and to rebuild the state's ageing social housing blocks.

These announcements were part of Victoria's housing statement, a policy document to increase housing supply.

The document highlights that short-stay rental sites have become a "popular feature" of Victoria's visitor economy but 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 to the places that can."

The 7.5% levy will apply to revenue from the platforms starting January 1, 2025.

Mr. Andrews stated that the levy's income would go towards Homes Victoria, which will fund the construction of social and affordable housing.

This statewide levy on short-stay accommodation is the first of its kind in Australia, allowing other states to follow suit.

Airbnb Says Levy 'Too High', Calls for Separate Changes

Airbnb Australia and New Zealand public policy head Michael Crosby stated that while his company supports policies to boost housing construction, the 7.5% rate is "too high" and would give hotels an unfair advantage.

"A rate this high could negatively impact Victoria's appeal as a tourism destination and penalize everyday Victorians seeking a local holiday when many are already grappling with the cost of living," he said.

"We believe a levy between 3% and 5%, in line with international policies, is more 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, and a code of conduct with penalties for misbehaving guests.

Tourism Body Warns 'Disastrous' Policy Will Harm Regional Businesses

Victoria Tourism Industry Council chief executive Felicia Mariani warned that the tax would be "disastrous" and a "significant impost" on travellers in regional Victoria.

"Consider a $400 per night rental over an average three-night stay," she said.

"That's $1,200, and a 7.5% tax on that amounts to a $90 fee. This is not an insignificant fee for visitors to the state."

Ms. Mariani expressed concerns that the increased costs would result in fewer overnight stays in regional areas and reduced tourism spending.

She said, "Destinations within two to two-and-a-half hours' drive from Melbourne are likely to be the worst affected by this policy."

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

Premier Insists Charge 'Only Fair' to Boost Housing Supply

Premier Andrews maintained that the 7.5% rate was "modest" and that "every single dollar" would be spent on maintaining and building affordable homes.

"Ultimately, there's a place for short-stay accommodations; they are very important, and many people use and like them," he said.

"We think it's only fair that these platforms—whether it's Stayz or Airbnb—have one framework to comply with, not separate ones for each local government area across the state.

"So, we will essentially eliminate local government's ability to charge fees. We believe this provides certainty to the sector."

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 added that his government would work to clear a backlog of 1,400 housing permit applications that have been with local councils for more than six months.