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.

Contributors

William Zhang

Carmelin De Francesco

Blake Trad

The post Victorian Government introduces 7.5% short stay levy to Parliament appeared first on SW Accountants & Advisors.

What is the Mental Health and Wellbeing Levy?

The Mental Health and Wellbeing Levy was a recommendation of the Victorian Government’s State Mental Health Royal Commission which found the mental health system operates in crisis mode, fails patients and requires a complete rebuild.

In order to rebuild and implement a range of mental health services as recommended by the Royal Commission, a levy is required to fund this program.

All revenue collected by the levy will be required to be spent on the provision of mental health services.

When does it come into effect?

The levy will be implemented as a payroll tax surcharge and will come into effect from 1 January 2022.

Who is it applicable to?

Employers must pay the surcharge if they pay Victorian taxable wages and Australian wages exceed the first annual threshold of $10m, with a first monthly threshold of $833,333.

Employers must also pay an additional surcharge if they pay Victorian taxable wages and Australian wages exceed the second annual threshold of $100m, with a second monthly threshold of $8,333,333.

How much is the levy?

The surcharge will be levied at the following rates:

• 0.5% of the portion of Victorian taxable wages above $10m
• 1% of the portion of Victorian taxable wages above $100m

If employers are members of a group, these thresholds apply at the group level.

These annual thresholds will be adjusted proportionately if an employer does not employee for a full financial year.

In respect of the period from 1 January 2022 to 30 June 2022 (transitional period), the respective annual thresholds are $5m and $50m.

Employers which are currently exempt from payroll tax, such as private schools, hospitals, charities and local councils will not be required to pay the levy.

When is this levy to be reported and paid ?

The surcharge will be payable when the payroll tax payment is due.

For example, if an employer pays payroll tax monthly, the employer will also pay the surcharge monthly. If an employer pays payroll tax annually, the employer will pay the surcharge annually.

What employers need to do prior to 1 January 2022 to get ready?

The surcharge will be separately calculated from the monthly or annual payroll tax calculation, however, the surcharge will be included in the same monthly or annual return.

Employers will not need to register with the State Revenue Office and will not lodge separate returns.

How can SW help?

Our team can:

• Assist with the payroll function – SW can assist employers understand and become familiar with the new requirements to make this change as seamless as possible.
• SW can prepare/review monthly or annual payroll tax reconciliations to ensure taxable Australian wages have been calculated correctly including determining if exempt wages have been identified and correctly classified.
• SW can provide assistance and advice where employers employ in other Australian jurisdictions during the financial year. For example, annual thresholds are required to be adjusted by the ratio of the total Victorian taxable wages to total Australian wages.

Contributors

Janelle McPhee

E jmchpee@sw-au.com

Joshua Teo

E jteo@sw-au.com

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