Short Stay Tax aka The Airbnb Tax

Victoria will become the first state in Australia to tax short-stay accommodation such as Airbnbs. From 2025, a 7.5 per cent levy on short-stay accommodation revenue will be introduced.

According to Dan, in Victoria, there are more than 36,000 short-stay accommodation places – with almost half of these in regional Victoria. More than 29,000 of those places are entire homes. 

Dan made the announcements as part of Victoria's housing statement, a policy document aimed at boosting housing supply… with the 7.5% levy towards Homes Victoria, to fund the construction of social and affordable housing, a quarter of which will go towards the construction of homes in regional Victoria.

Given the goal of introducing the tax, it’s not overly surprising they’ve excluded hotels from the scheme… However, it is interesting when we compare it to other parts of the globe. Let’s take a look around the world to see what other measures are being taken:

New York - tax applied, under the ‘hotel tax’, which also applies to hotels. Owners aren't allowed to rent out a whole apartment to guests staying for fewer than 30 days. The host must register with the city and physically share the living quarters with the guests for the duration of the stay. There's a maximum of two guests at a time, which means families are effectively barred

Florence, Italy - Authorities in Florence announced a ban on new short-term private rentals in the city's historic centre in June 2023, as part of an effort to draw full-time residents back to one of Italy's most popular tourist destinations. The mayor said property owners would be offered a tax incentive to convert their properties back to long-term rentals.

London, UK - Beginning in early 2017, short-term rentals of entire properties in London were limited to a maximum of 90 nights per calendar year.

San Francisco, USA - Regulations in San Francisco, where Airbnb's corporate headquarters is located, mean hosts can only rent out their entire space, while they are absent, for up to 90 days a year. To register a listing, an owner also needs to live there 75 per cent of the time — or at least 275 days a year — and can only have one primary residence. San Francisco also imposes a 14 per cent Transient Occupancy Tax on reservations of fewer than 30 nights.

Amsterdam, Netherlands - Amsterdam passed a regulation at the start of 2019 which means entire properties can only be rented for a maximum of 30 nights a year. Since April 1, 2021, hosts need a permit for a vacation rental as well as a registration number. Amsterdam also has a "tourist tax" — a nightly fee that Airbnb automatically collects from guests who don't live in the city, on behalf of property owners.

Toronto, Canada - In Toronto, local laws mean hosts can only list their entire property for a maximum of 180 nights per calendar year — but private rooms are exempt from this rule. The listing must also be the host's primary residence. Second homes, investment properties and vacation rentals can only be offered for long-term stays of 28 nights or more. Toronto also has a 6 per cent Municipal Accommodation Tax on all rentals.

Singapore - Short-term rentals are still legal in Singapore, but there are some strict rules around their use. Private homes in Singapore have a minimum rental period of three consecutive months to the same person. For public housing, which most Singapore residents live in, that period is a minimum of six months. In 2018 a Singapore court fined two Airbnb hosts $S60,000 ($69,000) each after they pleaded guilty to letting four apartments for fewer than six months without permission from authorities.

Berlin, Germany - Germany's capital banned most short-term rentals in 2016, but overturned the law in 2018. Hosts can now list their primary residence for as many days as they like, but secondary residences can only be rented for up to 90 days per year. Under a previous bill from 2014 — which was a reaction to a shortage of affordable housing — people renting out their homes for fewer than two months faced fines of up to 100,000 euros ($168,000).

Paris, France - In France, rentals of an entire primary residence are allowed to host guests for a maximum of 120 nights a calendar year, but the rule doesn't apply to the renting of individual rooms in a residence, or secondary homes.

Barcelona, Spain - In August 2021, Barcelona became the first European city to forbid short-term private room rentals, but it still allows entire properties to be rented if the owner has a licence. To let a short-term rental in Barcelona for fewer than 31 days, an owner must apply to have their property approved as a "tourist household", which also draws a tourist tax.

Whilst we don't disagree with a tax on Airbnbs in principle, we do think 7.5% is aggressive. It will certainly impact the market in terms of future investors coming in and possibly exiting the market, which is hopefully going to help alleviate the long term affordable housing crisis. We’re just hoping it won’t have too much of a negative impact on regional victoria’s tourism. Only time will tell…. 

Until next time