Short Stay Levy Effective January 1st 2025
In August 2024, the Victorian State Government revealed that the Short Stay Levy, first introduced in the Victorian Housing Statement in September 2023, is set to take effect from January 1, 2025.
The Short Stay Levy Bill 2024 was presented to Parliament on August 27, 2024, and introduces a 7.5% levy on all short-term accommodation bookings starting from January 1, 2025.
The introduction of the tax is the State Governments attempt to entice investors to shift stock to the long-term rental market. However, a recent study of 500 short stay property owners, by New Focus Research, has found that more than 90 per cent of owners had not plans to let go of their investments.
Further to this 51 per cent of respondents said they would reduce how often they travelled and 55 per cent would shorten the length of their stay.
What is the Short Stay Levy?
The Short Stay Levy (stays less than 28 days) is a new and additional tax, charged at 7.5% of the total booking fee.
What type of property is subject to the Short Stay Levy?
Premises in Victoria that are used for short stay rentals are subject to the levy. Principal places of residence and commercial accommodation such as hotels, motels and caravan parks are exempt.
The 7.5% will be charged on a total booking fee. What is a booking fee?
The total booking fee is the booking rate, plus any cleaning fee or booking fee associated with using a commercial booking platform (ie. AirBnB).
My business is built on selling short stay accommodation using privately owned homes. Will the levy apply on the property I manage?
Yes. The short stay levy will apply to any dwelling that is privately owned, meaning not registered as commercial accommodation. Principle places of residence are exempt.
How will the introduction of the levy impact regional Victoria’s visitor economy?
Regional Victoria’s visitor economy employs close to 120,000 people and contributes $10.3bn to the state’s economy. Short stay accommodation is a critical component of the accommodation supply in Victoria, especially in those regional areas where ‘traditional’ accommodation options are not adequate to meet visitor demands
