Victoria’s Short Stay Levy: What it means for your investment

As of 1 January 2025, the Victorian government has introduced further changes to its housing policies with the introduction of the Short Stay Levy (SSL), or “Airbnb Tax” as it has been dubbed throughout the media. This additional “tax” is targeted towards short-term rental accommodation, being another measure introduced by the Victorian government to disincentivise use of Victorian property for short-stay accommodation. 

Understanding the Victoria Short Stay Levy

The SSL is a 7.5% charge on “total booking fees” paid on “Short Stay” bookings made after 1 January 2025.

A “Short Stay” is defined as “Occupation of the premises for a continuous period of less than 28 days” [Short Stay Levy Act 2024 (Vic) (SSL Act), s 3]. Therefore, if accommodation is provided in interrupted periods of less than 28 days (excluding the checkout day), such as every weekend or occasional single days, this would be considered a short stay and potentially attract the SSL. 

Implications of the Levy

The SSL applies to the total amount paid for the stay. This includes cleaning fees, booking fees and GST charged on these services (where it applies). Where bookings made through a platform like “Airbnb” or “Stayz”, the platform is responsible for payment of the SSL, where no platform is used, the party providing the accommodation (ie. property owner or tenant) will be responsible for the SSL.

From an economic perspective, on the surface it may appear that the platform(s) are covering the costs. However, this will likely be built into the price of short term accommodation in Victoria moving forward. Airbnb have outlined on their website that fees for stays of 28 nights or more “may be lower” than for stays which are less the 28 nights, indicating that its’ fees are likely to have been impacted by this legislation and are, therefore, being passed onto the consumer.  

Below is an example of how the fees apply:

Scope of short stay accommodations affected and exemptions

A variety of accommodation types are impacted by the SSL such as; 

• Entire house or apartment
• A private room with a house or apartment
• A granny flat or separate residence
• Tiny homes or caravans parked on land 

Principal residences receive an exemption from the SSL, however additional structures on the same land ie. granny flats, tiny homes or caravans, will attract the Levy.

The SSL is predominantly targeted at individual residential accommodation providers, while, more commercial scale providers, such as hotels, motels, hostels or similar accommodation types (as defined under the GST Act) do not attracting the levy.  

Other types of accommodation that do not attract the levy include; 

• Retirement villages or aged/ residential care facility
• Student accommodation associated with an education institution, university residences or school boarding houses
• Accommodation provided to a contractor, employee or client of a connected facility or within a broader facility e.g. schools, healthcare facilities, farm worker housing, mining camps, etc  
• Temporary crisis accommodation provided in specific circumstances

Lodgement obligations and compliance

Owners of properties not listed through platform but subject to the SSL will need to register with the SRO and report your short stay booking information via a return. Below is a summary of lodgement obligations for the SSL; 

When lodging your return, you will need to report information on each short stay provided, including the following; 

• Property address
• Start date
• End date
• Total booking amount

If your property type is one of the excluded types above, you must fill out a declaration on the SRO website to avoid the SSL applying. If your property is on a booking platform, the platform may require you to fill out a declaration upon listing. In this case, you do not need to complete the declaration on the SRO website. 
Penalties for non-compliance can be significant, including penalty tax up to 75% of the levy not reported, with additional interest applied for the period the amounts remain overdue.

Key takeaways for property owners

2025 has brought significant changes to the Victorian residential property and accommodation landscape, with the SSL representing another tax burden for Victorian property investors.

As the first round of lodgements has recently fallen due, short stay accommodation providers, particularly those managing their properties themselves, must ensure they are up to date with their obligations and are managing their cashflows accordingly. 

FOR MORE INFORMATION

Should you wish to further discuss the SSL and its application to your circumstances in more detail, get in touch with your local RSM advisor.