Victoria has introduced legislation that some have dubbed the ‘Airbnb tax’ in a move that aims to strike a balance between short and long-term housing and ease the rental crisis.
The New ‘Airbnb Tax’ in Victoria
Under the new legislation, properties listed on platforms like Airbnb will attract a 7.5 percent levy, acting as a disincentive for those wanting to run short-stay accommodation and hopefully freeing up more long-term rental options. The new tax will begin on January 1st for stays less than 28 days and will affect the nearly 50,000 properties in the state listed as short-stay rentals.
Government’s Goals: Balancing Housing and Supporting Long-Term Rentals
The Victorian Premier, Tim Pallas, told The Guardian that the reforms are about balancing the housing market. “It is important we recognise and give a signal to the market that our priority is to get people into homes and long-term, secure rental accommodation is important,” he said. The levy should raise around $60 million a year, which the government has pledged to reinvest into more social and affordable housing.
Local Councils and Residents React to New Legislation
The government also plans to give local councils and owner corporations the power to put caps on the number of short-stays in their jurisdiction. Residents living near Airbnb properties have long complained about issues such as security, constant visitors, parties, and a general boarding house vibe. Local government regulations could include requiring permits or capping the number of nights a property can be rented on platforms like Airbnb.
Airbnb’s Response to the New Regulations
Unsurprisingly, Airbnb is not pleased with the legislation. “Airbnb has long advocated for a small levy, paid for by the guest at the time of booking, that goes into affordable housing. We need to build more houses and this is a way to raise much-needed funds to do that,” said Michael Crosby, head of public policy at Airbnb. He added, “However, 7.5% is too high and will jeopardize Victoria’s ability to attract tourists to areas lacking traditional accommodation and penalize families looking to travel as cost-of-living pressures continue to bite.”
