Victorian Government introduces 7.5% short stay levy to Parliament
11/09/2024
Short stay booking platforms and owners of short stay accommodation should be aware of the new tax commencing from 1 January 2025.
On 27 August 2024, the Victorian Government released the Short Stay Levy Bill 2024 (Vic). The Bill introduces a levy of 7.5% on booking fees for providers of short stay accommodation from 1 January 2025. This follows the Government’s announcement in September 2023 to introduce a levy as part of its Housing Statement.
The policy aims to increase the supply of long-term rental housing, with revenue from the levy helping to fund Homes Victoria to build social and affordable housing across Victoria (25% of funds are set to be invested in regional Victoria).
The levy
The levy of 7.5% of the total booking fee (including GST) will be payable for each short stay of less than 28 days in Victorian premises that are short stay accommodation.
The levy will be imposed on all bookings made from 1 January 2025. The levy does not apply to a short stay booking made before 1 January 2025, regardless of whether the short stay is completed on or after 1 January 2025.
Short stay accommodation
Short stay accommodation covers any accommodation other than the principal residence of an owner or renter, commercial residential premises (e.g. hotel, motels, caravan parks etc) and certain care and support facilities.
Premises with more than one use can also qualify as short stay accommodation. The levy will be imposed on the part of the property used as short stay accommodation.
Who will be impacted?
Online and offline booking platforms, owners or renters of short stay accommodation are liable for the levy.
The liability for the levy will arise on the completion of a short stay.
Lodgement and registration obligations
Providers of booking platforms, owners or renters accepting bookings for short stays must apply to the Commissioner for registration and lodge returns every calendar year to pay the short stay levy.
Returns must be lodged every 3 months for persons whose total relevant booking fees in a year are $75,000 or more.
Planning and development
Owners’ Corporations can ban short stays in their strata scheme.
There will also be changes to planning systems to allow local councils the power to regulate short stay accommodation.
Details of these changes are yet to be finalised.
How SW can help
Online platforms such as Airbnb and property owners offering short stays should consider the impact of the provisions outlined in the Bill and their reporting and payment obligations in early 2025.
SW can assist in determining whether your premises will be subject to the levy and with registering and lodging returns.
Please contact our SW advisors for more information on how this may impact you.
