Victoria’s Short Stay Levy – A Revenue Grab Dressed as Housing Reform

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The Short Stay Levy Act 2024 (Vic), set to commence from 1 January 2025, is the latest example of regulatory overreach masquerading as housing policy reform.

Under this new regime, any property in Victoria offered for short-term accommodation (less than 28 days) will attract a 7.5% levy on the total booking cost. This includes cleaning fees, GST, and platform charges—effectively treating private property as a taxable hotel room.

For owners, this is not merely an adjustment to pricing—it is an administrative burden riddled with traps for the unwary.

What Does the Levy Apply To?

The levy is broadly applied to:

  • Entire homes, apartments, and secondary dwellings (e.g., granny flats, caravans, tiny homes) used for short-stay rentals.

  • Private rooms in dwellings that are not the host’s principal place of residence (PPR).

The levy does not apply to:

  • The owner’s or renter’s PPR when they are also residing in the property.

  • Commercial accommodation (e.g., hotels, motels, hostels).

  • Specialist housing like retirement villages, rooming houses, student accommodation, and crisis housing.

This distinction creates yet another layer of complexity for property owners trying to do the right thing—and creates opportunity for government enforcement and penalties if you get it wrong.

How the Levy Works – and Who Pays

If you exclusively use booking platforms like Airbnb or Stayz, the platform is responsible for collecting and remitting the levy to the State Revenue Office (SRO).

However, if you take direct bookings—including via your own website, phone or personal networks—you must:

  • Register with the SRO.

  • Keep detailed records of booking amounts, guests, and dates.

  • Lodge and pay either:

    • Quarterly, if your annual income from short stays is $75,000 or more; or

    • Annually, if your short stay earnings fall under that amount.

The administrative burden cannot be overstated. You are expected to manually maintain spreadsheets and supporting documentation to verify every transaction, even for properties generating relatively modest income.

And if you make a mistake?

Expect to be pursued with penalties, interest, and enforcement action. The SRO’s reputation for aggressive recovery tactics is well-known, and the system is clearly designed to catch out honest individuals who fail to perfectly comply.

What This Means for Purchasers

If you are considering purchasing a property in Victoria with a view to using it as a short-stay rental, be aware:

  • You will likely be liable for this tax if the property is not your PPR.

  • Owners Corporations now have powers to prohibit short-stay use, regardless of your intentions.

  • Local councils may also impose their own restrictions or require additional permits.

  • You will need to keep complete financial records, even if you only rent occasionally.

This is a sharp contrast to previous expectations about the flexibility and usability of residential investment properties in Victoria.

A Transparent Money Grab Disguised as Policy

Let’s call this what it is: a thinly veiled revenue-raising measure, intended to plug budget shortfalls stemming from years of unsustainable state spending.

This policy will do little, if anything, to increase long-term housing supply—but it will discourage investment, punish regional tourism operators, and burden everyday Victorians who use short stays to help cover their mortgages.

At Victorian Property Settlements, we assist both vendors and purchasers in navigating the regulatory implications of their property decisions. While we do not provide legal advice, we offer clear and structured conveyancing guidance under the Conveyancers Act 2006 (Vic).

If you're thinking of selling a short-stay property, or buying one with potential short-term rental use, reach out to us first. We’ll ensure you know exactly what obligations may arise under this and other applicable legislation.