Airbnb gears up to fight Victoria’s short-term rental tax

The draft bill moves to impose a 7.5 per cent levy from 1 January 2025, with all revenue from the tax – estimated to total roughly $60 million per year – to be devoted to creating social and affordable housing through Homes Victoria.

In addition, the new laws would give owners’ corporations the ability to ban short stays in their developments if approved by a 75 per cent share, and allow local councils to create their own regulations around short-stay accommodation.

Airbnb, which consulted on the plan, described the draft legislation as a “disappointment” and accused the government of reneging on its promise, set out in the Victorian Housing Strategy, of creating “one simple set of rules” for the short-stay sector in Victoria.

In an open letter to hosts in the state, the rental platform said it was “was not appropriately consulted on the changes” but pledged to push for alterations before the legislation is passed.

Prior to the draft legislation being made public, Airbnb advocated for the government to lower the levy to between 3 per cent and 5 per cent, while applying it to all accommodation providers, such as hotels. It’s a move the company said would “raise more, but cost travellers less”.

Beyond the size of the tax, Airbnb has flagged major concerns with the state’s decision to give councils the authority to regulate short-stay accommodation separately.

“This could lead to up to 79 different sets of regulations imposed by local councils, resulting in more bureaucracy and uncertainty,” the letter from the platform said.

“If restrictions or caps are considered by local governments, this has the potential to reduce choice and affordability of accommodation options in the tourism sector. There is no evidence to suggest that these measures improve rental availability or affordability,” it furthered.

Owing to the decision to bring local councils into the mix, Airbnb accused the legislative announcement of “creating confusion” but sought to assure Victorian users of the platform that it would “work tirelessly to champion your needs and interests”.

“We want to reassure you we are continuing to engage with the government as the legislation moves through Parliament to advocate for sensible and evidence-based changes to the draft legislation,” the tech firm said.