Improved short stay reforms

The Victorian Greens have negotiated with the state government to agree on reforms to the short-stay accommodation industry.

Last year, the government had proposed a 7.5 per cent levy on operators like Stayz and Airbnb, which on its own was seen by many critics as a gift to the short-stay industry that would do nothing to solve the housing crisis.

However, following negotiations with the Greens, the state government announced a further series of reforms on August 27 providing local governments and owners’ corporations (OCs) stronger powers to make decisions about short stays.

Announced as part of the landmark Housing Statement, the Short Stay Levy Bill 2024 has been informed by consultation with local councils, industry and tourism bodies to “get the balance right for communities across Victoria”. 

The legislation introduces a 7.5 per cent levy from January 1, 2025, on short-stay accommodation bookings, which is expected to raise around $60 million a year for Homes Victoria to provide more social and affordable housing. Twenty-five per cent of these funds are to be invested in regional Victoria.

It also gives local communities the ability to respond to local concerns – with OCs now able to ban short stays in their developments if approved by 75 per cent of owners. There will also be changes to the planning system to give local councils the power to regulate short-stay accommodation. 

In Victoria, there are around 63,000 short stay accommodation places – with nearly half of these in regional Victoria. Almost 50,000 of those places are entire homes which are not available for long-term rental.

“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,” Treasurer Time Pallas said.

This long-overdue legislation will bring Victoria in line with global standards and address the concerns of apartment dwellers across the state.

Short-stay lobby group We Live Here said the "long overdue legislation" would finally bring Victoria in line with "global standards and address the concerns of apartment dwellers across the state". 

"For more than a decade, We Live Here, a community advocacy group, has been championing these very policies. Our group has organised community forums, made submissions to inquiries, and lobbied politicians to highlight the impact of an unregulated short-stay industry on residents," a We Live Here spokesperson said. 

"If enacted, these measures could dramatically improve the lives of apartment dwellers across Victoria by providing greater oversight and control over short-stay practices."

Stayz senior director, government and corporate affairs Eacham Curry expressed his disappointment with the changes, saying the announcement was “a departure from what was previously proposed.”

“[The Bill] will make primary places of residence exempt from the levy, including those renting a room in their home, as well as giving local government and OCs stronger powers to limit or ban short-stay accommodation in their communities, and putting night caps and other fees back on the table,” Mr Curry said.

“These changes will undermine the original purpose of the levy; to raise money for social housing initiatives, and risks creating bureaucratic complexity that will drive away tourism dollars.”

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. The levy will also only apply to stays less than 28 days. 

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