New short-stay levy targets Airbnb & Stayz but spares hotels and pubs
Accommodation Australia says Victoria's new short-stay levy strikes the right balance but Airbnb disagrees & says it unfairly benefits the hotel industry over everyday Victorians
Accommodation Australia (AA) welcomed the announcement that hotels, and pubs offering accommodation and all regulated accommodation providers will NOT be targeted by the Victorian Short Stay Levy introduced earlier this week.
However, Victoria has enforced a widespread 7.5 percent levy on short-stay rental properties found on platforms like Airbnb and Stayz in an effort to counterbalance the impact the sector has had on the housing crisis.
From the beginning of January 2025, users will be forced to pay a 7.5 percent short-stay levy on top of their bookings as part of broader reforms by the Victorian government to address a lack of housing supply and the funds generated will help fund social and affordable housing.
The levy is expected to raise $70 million a year from 2025 onwards and the state also committed to building 800,000 homes over the next decade.
AA stated the decision to spare regulated accommodation providers reinforces the important distinction that hotels and pubs do not contribute to the removal of housing stock from the long-term rental market.
AA National CEO Michael Johnson said the announcement will enable Victorian commercial accommodation providers to remain competitive against other states and territories when pitching for business.
“It will also provide investors with the confidence and certainty they need to encourage future development of new hotel accommodation infrastructure across Victoria,” he said.
In the lead-up to this announcement, AA adopted a targeted approach to educate and inform key industry and government stakeholders, providing a detailed policy position, outlining the concerns of members.
AA (Vic) General Manager, Dougal Hollis congratulated the Victorian Government for engaging with and listening to our industry.
“Not including hotels and pubs in the short stay levy is a common-sense approach,” he said.
“Hotels are huge employers and are a key part of any vibrant city. Victoria has led Australia’s new hotel development boom since 2020, with almost 9,000 new hotel rooms now available across Melbourne alone.
“Offering commercial accommodation comes with significant regulatory requirements and related costs and we are still recovering from the pandemic. We appreciate the government has taken this into account when shaping these policy settings.”
Reacting to the announcement that Airbnb users will be paying the levy, Susan Wheeldon the Country Manager of Airbnb in Australia and New Zealand said: “Airbnb supports tourism taxes. We’ve worked with many cities around the world to make visitor levies work, remitting over $10 billion in taxes globally – a vital source of funding for local governments that are supporting local communities, critical infrastructure, and housing projects.
“The Victorian Government has listened, but its proposal differs from ours in two important ways.
“Firstly and most critically, the levy will apply only to short-term rental accommodation, creating an uneven playing field that puts everyday Victorians who share their home behind large corporate hotel chains.
“Secondly, they have arrived at a levy of 7.5 percent, which is too high and will slug travellers’ hip pockets when they can least afford it. A contribution of 3 to 5 percent across all accommodation providers will raise more, but cost travellers less.
“A tax that unfairly benefits the hotel industry over everyday Victorians is not the right approach.
“The government’s proposal is not without merit though – it acknowledges the valuable contribution platforms like Airbnb make to attracting guests and growing the economy, and sensibly avoids harsh measures like restrictions on the number of nights people can share their homes.
“Our Hosts are real people, who love their communities, support jobs, and direct guests to local businesses during their stays, but who are also struggling with the cost of living. They also provide a service that people absolutely love, with more than one million people staying in an Airbnb globally every night.
“It’s about getting the balance right. Short-term rentals aren’t the cause of the housing crisis, but we believe there is more we can do to help make a positive difference like advocating for policies that promote the creation of new housing.
“Housing affordability and supply is complicated. We need to build more homes, and both the Victorian and federal governments are doing just that. We need to build more affordable and public housing. We need to protect renters, and we need to fill the one million empty homes around Australia and the 300,000 homes in Victoria with families who need housing now. According to the ABS, over 11 percent of homes in Victoria are currently sitting empty.
“Short-term rentals in Victoria make up less than one percent of total housing stock. Acute housing issues existed long before the founding of Airbnb, and targeting these properties is not a long-term solution.
“No one wants to see Victoria’s appeal as a tourism destination be diminished by higher travel costs, but this proposal stops short of generating more funds for the community by not applying it to hotels as well. Levies are clever as they make the community shareholders in tourism, so let’s grow the pie for everyone instead of giving some a bigger slice.”
Mandy has over two decades of experience in accommodation and tourism industry writing, and she is also an accomplished editor and publisher. As co-Director of Multimedia Pty Ltd, a trusted B2B content provider for the accommodation and education sectors in Australia and New Zealand, she oversees high-quality print and digital content across notable publications, including AccomNews, Resort News, and School News, along with the property listing platform AccomProperties. Mandy’s contributions have been recognised with the Female Leader Award at the Best of Tourism 2023 and the ARAMA Life Member Award in 2024.
Good article Mandy, but not really a case of “sparing” hotels in the sense that if the levy was aimed at increasing long-term rental accommodation, then hotels don’t really come into the equation. You can’t turn a purpose-designed hotel room into long-term residential, but you can dissuade owners of houses and apartments built for long-term rental from being converted into short-term stays. The unregulated short-stay operators always try to drag hotels into the issue because they think that will stop governments from acting, but for once Dan has done the right thing, though a 7.5% levy is still only a mild deterrent.
Excellent point thank you Peter!
I suggest all short stay accomodation – ie houses, apartments etc.
cancel all their bookings for a month and see how the hotels cope – what a load of controlling rubbish. People who stay at short stay houses are being victimised and bullied – families wont be able to afford to have holidays…..WA is the same – short stay homes are NEEDED and all these laws do is encourage owners who go to the immense trouble to open their homes to visitors, to SELL
Short term accommodation is different to vacant properties – such as holiday homes and vacant city pads.
If the aim is to make property available for more tenants, short stay accomodation is not vacant property that is sitting under utilised. Why wouldn’t the target be the holiday homes / second homes that sit vacant most of the year around – a well off family with a holiday home or city pad can possibly afford this levy more than someone who needs to rent out the property for short term rental in order to make mortgage repayments? Yet these are exempt from the levy and the vacant property tax!
We purchased one apartment with our daughter as she can’t currently afford to rent or buy on her own – she still lives at home and doesn’t pay board so she can contribute the maximum amount to her mortgage. Along with us assisting and the rental income, she can make the mortgage repayments and in 10 years, she should be able to move into the apartment and afford the repayments on her own. We had it rented out long term lease but the tenant was so bad that we had to replace the oven, all tapware in the bathroom, all blinds, repaint, repair walls and spend nearly 5 days cleaning off grease and grime – it is only a small one bedroom apartment and the bond didn’t come close to covering the damage and unpaid rent. That was a 12 month lease and we were unable to move the tenant out. When the tenant left we decided to try short term rental. Our income overall is much the same but the effort is significantly higher. At least with short term rental we get a say who stays in our apartment and get to ensure it is well maintained and kept. I would never consider long term rentals in Victoria again given the limited control landlords have over their investment.
I always use short term rentals when I travel as hotels just don’t work for young families who often need bedrooms rather than shared rooms and a form of cooking facilities. This levy will only make it harder on those that can least afford to travel.
Our guests are fantastic and all love the way we are different to a hotel. We support the local businesses and provide a much better experience for our beautiful city. Our guests are great with our neighbours and our neighbours have had no complaints or concerns. This was genuinely the only option for my daughter to be able to one day move out of home and get access to her own property, these decisions are hitting those that can afford it the least and giving a free pass to hotels and the wealthy with vacant holiday and second homes.
Hit up the hotels, the wealthy multi property owners and the businesses of multiple short term accommodation – not the genuine mum and dad battlers.