Victoria’s Airbnb tax comes into effect
Short-term rentals in Victoria will be slogged with a 7.5 per cent levy for reservations made after New Year’s Day, raising concerns over Victoria’s tourism industry.
Interestingly, the 7.5 per cent fee is derived from the total cost of the accommodation, including cleaning fees, GST and any service charges associated with the booking.
Property owners making up to $75,000 will be required to state their earnings annually, with the first statement due 30 January 2026. However, those earning more will have to lodge quarterly returns.
The legislation has also given local governments the opportunity to regulate the number of days that properties can be made available for short-stay accommodation.
The Victorian government has explained that the levy – estimated to total $60 million a year – will be used to develop social and affordable housing via Homes Victoria.
The levy will not apply for short-term rentals booked for 28 days or longer.
Charlotte Brett, founder and director of BNB Butler, explained that the legislation would have unintended consequences for the state’s tourism industry.
“This will have greater and more far-reaching effects on the tourism industry that the policymakers have accounted for, and is going to hit hosts harder than many realise,” she said.
“Hosts must stay on top of their pricing to make sure they are accounting for the tax while remaining competitive. And they should consider clever changes like providing discounts for all stays over 28 days where the tax doesn’t apply.
“They should also check if they are eligible for an exemption so they don’t miss out.”
The legislation has received criticism from both sides of the political spectrum.
Victoria’s new Liberal leader Sam Groth told Sky News that there has been insufficient research into how the levy will impact the property market.
“We tried to seek that information from the government when they were implementing this tax in the legislation through Parliament a few months ago, but the government’s done absolutely zero modelling on how many properties this will drive back to the long-term rental market,” he said.
Speaking to Newswire, the Victorian Socialists’ Jordan van den Lamb said the levy will increase costs for consumers.
“Since this levy was announced, the government was told that it will do nothing to help ease our housing crisis. We’re already seeing investors simply passing this cost on to users,” he said.