On 27 August 2024, the Victorian State Government introduced the Short Stay Levy Bill 2024 (Vic) proposing a 7.5 per cent tax (short stay levy) on short stays of less than 28 days in certain accommodation across Victoria.
Who is affected?
The levy is likely to impact approximately 63,000 short-stay properties in Victoria. The levy applies to two groups:
- Booking platform providers: When short stays are booked through a platform, the platform provider is liable.
- Property owners and renters: Those who accept direct bookings for short stays are also liable.
The levy will come into effect from 1 January 2025 and will significantly impact holiday accommodation and similar short-term rental properties, such as those booked through platforms such as Airbnb and Stayz. The Government has indicated the revenue from the levy is expected to raise about $60 million a year, which will go to Homes Victoria and support the building and maintenance of social and affordable housing.
What actions are required?
Affected booking platform providers, property owners and renters must register with the Commissioner and lodge returns regularly to pay the levy:
- Quarterly Returns: Required for those with booking fees of $75,000 or more annually
- Annual Returns: Required for those with booking fees below $75,000 annually.
Are there any exemptions?
Certain types of properties are exempt from the levy, including:
- Premises used as the principal place of residence by the owner or renter
- Commercial residential premises such as hotels and motels
- Other specified premises like residential care facilities, retirement villages and certain rooming houses.
Penalties for non-compliance
Owners or renters must provide booking platforms with a declaration if their premises are not considered short stay accommodation. If a declaration is later found to be false, both the declarant and the platform provider may be jointly liable for the levy, along with any interest and penalties.
Need Assistance?
If you have questions or need assistance navigating these new requirements, please contact your HLB tax adviser.
Co-authored Timm Gavenlock – Senior Consultant Melbourne