More long-term rentals and more social homes

In our region, it's well understood that short-stay rentals can limit the availability of properties for families seeking long-term accommodation. 

Across Victoria, there are around 63,000 short-stay accommodations, spread between metropolitan and regional areas. Notably, nearly 50,000 of these are entire homes that are not accessible for long-term rentals.

In response to the growing demand both in Victoria and nationwide, the Allan Labor Government has introduced the Short Stay Levy Bill 2024 to Parliament this week. This initiative aims to increase the availability of social and affordable housing and to make more properties available for long-term rentals.

Informed by consultations with local councils, industry, and tourism bodies to get the balance right for communities across Victoria. The legislation proposes a 7.5 per cent levy on short-stay accommodation bookings from January 1, 2025, including bookings made through popular platforms such as Airbnb and Stayz.

Minister for Housing Harriet Shing highlighted the benefits of the new policy, commenting that the “Victorian short stay levy will support the delivery of more social housing,” while encouraging “more people to use their properties for permanent rental accommodation across the state.”

The policy is anticipated to generate around $60 million annually, with all revenue going to Homes Victoria to support the construction and upkeep of social and affordable housing.

The levy will not apply to homeowners renting out all or part of their principal residence for short stays. If a homeowner is on holiday and someone temporarily occupies their home, the levy will not be imposed.

Commercial accommodations, such as hotels, motels, and caravan parks, are also exempt. The levy will only apply to stays of less than 28 days, and transitional arrangements will ensure that bookings made before January 1, 2025 are not affected.

The Labor Government is also empowering local communities to respond to local concerns. 

Owners’ corporations will now be 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.

I note that the Short Stay Levy Bill 2024 is anticipated to be debated in both the Lower and Upper Houses of State Parliament shortly, and hence the reforms mentioned in this article await parliamentary processes before they can be implemented. •