A long-term tax on short-term stays
Victoria will become the first jurisdiction in Oz to tax short-term accommodation platforms like Airbnb and Stayz, with a 7.5% levy that will kick in from January 2025. It’s an approach that’s been taken by major cities around the world – most notably New York – as local housing shortages bite. Airbnb says it amounts to a “de facto ban” on its business, but Premier Daniel Andrews said “it makes sense” to tax them because “there’s between 30,000 and 40,000 homes that are being Airbnb’ed or other platforms” and that “means they’re not available for someone else to lease, to rent, on a longer-term basis”.
HOW WILL IT WORK?
Well, the tax itself is pretty straightforward – short-term accommodation providers will pay 7.5% of their revenue to the Victorian Government, and it will replace any individual local council charges that have been applied in the past. As for what the money will be used for – Andrews says “every single dollar” from the “modest” levy will go to building and maintaining social and affordable housing in Victoria. And blow us over with a feather, Airbnb’s not entirely on the same page… Spokesman Michael Crosby says the tax is “too high” and that “somewhere between 3-5%, which is in line with international policies, is appropriate”. And Stayz’s Eacham Curry says there are unanswered questions about whether the tax will apply to short-stay rentals not listed on the major platforms.
WILL IT HELP FIX THE HOUSING SHORTAGE PROBLEM?
It’s not a silver bullet because the growth of short-term rentals on platforms like Airbnb and Stayz isn’t the only issue when it comes to shortages in the housing market. Estimates show Melbourne needs about 44,000 new homes annually to keep up with population growth until 2051 – so there’s still a shortfall that the Victorian Government says its new housing plan released yesterday will go some way to address. And you already know about high interest rates, high property prices and labour shortages in the construction industry that are causing problems across Oz… That’s why the Commonwealth (via its new Housing Australia Future Fund) and the states/territories are hustling, and experts say get ready for more steps like the ones Victoria took yesterday…
Know someone who'd be interested in this story? Click to share...
The Squiz Today
Your shortcut to being informed, we've got your news needs covered.
Also Making News
Get the Squiz Today newsletter
Quick, agenda-free news that doesn't take itself too seriously. Get on it.