Victorian Tourism Industry Council Chief Criticizes Government’s Proposed 7.5% 'Short-Stay Levy'

The levy, designed to address the state’s housing crisis, is expected to have minimal impact on converting properties from short-term to long-term rentals, according to the report’s findings.

The survey, which examined the perspectives of both property owners and consumers, revealed that only 1 to 6 percent of short-stay property owners are likely to shift their rentals to the long-term market once the levy is introduced.

New research from the upcoming ‘Short-Term Rental Perceptions’ report has raised concerns about the Victorian Government’s proposed 7.5% Short-Stay Levy.

The levy, aimed at alleviating the state’s housing crisis, is expected to have minimal impact on converting properties from short-term to long-term rentals. The report indicates that only 1 to 6 percent of short-stay property owners are likely to switch their rentals to the long-term market once the levy is enforced.

Consumer behavior is also projected to shift significantly, with 51% of respondents planning to cut back on travel and spending, and 55% intending to shorten their stays. Coastal and regional areas are anticipated to be the hardest hit by these changes in tourism behavior.

Felicia Mariani, CEO of the Victorian Tourism Industry Council (VTIC), argues that the research validates the tourism industry’s concerns about the potential negative effects of the proposed levy.

New research from the upcoming ‘Short-Term Rental Perceptions’ report has raised concerns about the Victorian Government’s proposed 7.5% Short-Stay Levy.

The levy, aimed at alleviating the state’s housing crisis, is expected to have minimal impact on converting properties from short-term to long-term rentals. The report indicates that only 1 to 6 percent of short-stay property owners are likely to switch their rentals to the long-term market once the levy is enforced.

Consumer behavior is also projected to shift significantly, with 51% of respondents planning to cut back on travel and spending, and 55% intending to shorten their stays. Coastal and regional areas are anticipated to be the hardest hit by these changes in tourism behavior.

Felicia Mariani, CEO of the Victorian Tourism Industry Council (VTIC), argues that the research validates the tourism industry’s concerns about the potential negative effects of the proposed levy.

“Short-stay accommodation is crucial to Victoria’s accommodation supply, particularly in regional areas where traditional options are limited,” Mariani stated. “This is equally important in Melbourne, where short-stay options are a vital part of the city's tourism infrastructure and cater to both visitors and residents.”

“While VTIC supports the regulation of short-stay accommodation to address the housing crisis, we believe the levy will fall short of its goal to increase long-term rental availability.”

The research also highlights that 20% of fully furnished short-stay accommodation users rely on these rentals during critical life events such as relocation, medical treatments, domestic violence, and natural disasters.

“This proposed levy might have unintended consequences for those who depend on short-stay accommodation in times of crisis,” Mariani added.

The report suggests that the levy could jeopardize a $39 billion industry employing over 257,500 people across Victoria, with 118,700 of these jobs in regional areas.

VTIC is calling on the government to collaborate with industry stakeholders to find more effective solutions to the housing crisis without adversely affecting the state’s tourism and accommodation sectors, including those crucial options available short stay accommodation in Melbourne.

The ‘Short-Term Rental Perceptions’ report, conducted by New Focus Research, was commissioned by the Australian and NZ Short Term Rentals Accommodation Association (ASTRA) and the Victorian Tourism Industry Council (VTIC).

The report suggests that the levy could jeopardize a $39 billion industry employing over 257,500 people across Victoria, with 118,700 of these jobs in regional areas.

VTIC is calling on the government to collaborate with industry stakeholders to find more effective solutions to the housing crisis without adversely affecting the state’s tourism and short-stay accommodation sectors.

The ‘Short-Term Rental Perceptions’ report, conducted by New Focus Research, was commissioned by the Australian and NZ Short Term Rentals Accommodation Association (ASTRA) and the Victorian Tourism Industry Council (VTIC).