The Airbnb Tax Double-Up: It’s Happening Everywhere

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You’ve got a house on Airbnb. You’ve listed it. Taken photos. Maybe hosted a few weekends and summer guests. You think you’re covered.

But unless your property is let for more than 185 nights in a calendar year, you’re not just at risk, you’re a target.

Here’s what’s happening across Victoria — from the coast to the city:

First Slice: The Short-Stay Levy

This one’s obvious. A 7.5% tax on all your Airbnb income. Every night you rent, the Government takes their cut. It applies statewide.

You might not like it, but at least it’s clear.

Second Slice: Vacant Residential Land Tax (VRLT)

This is the kicker. If your property isn’t let, not just listed, for at least 185 nights in the calendar year, you’re hit with vacant land tax.

How much?

  • Year 1: 1% of the capital improved value (CIV)

  • Year 2: 2%

  • Year 3 and beyond: 3%

So that $1.2 million investment property in Rye or St Kilda? You could be paying $36,000 a year in land tax alone by the third year, plus the short-stay levy.

“But I use it on weekends. I had guests.”

Doesn’t matter. You must prove you’ve let it for 185 nights. That means keeping booking records, calendars, and guest history. It’s not based on your intention. It’s based on data.

And this isn’t limited to inner Melbourne. The VRLT expansion applies across:

  • Mornington Peninsula

  • Surf Coast

  • Bass Coast

  • Yarra Ranges

  • Geelong

  • Inner, middle, and even some outer Melbourne suburbs

This Is Not a Drill

You can’t Airbnb your way out of this unless you hit 185 nights. And you can’t dodge it by leaving the house listed and idle. The State Revenue Office is now watching usage, not marketing.

And once you’re in the VRLT net, the rate increases every year you stay under that threshold.

What You Should Do Now

  • Track lettings: Keep hard records. Screenshots aren’t enough.

  • Crunch the numbers: If you can’t reach 185 nights, the tax hit might cancel out your income.

  • Consider alternatives: Long-term leasing may remove both tax risks.

Bottom Line?
It’s everywhere now.
If your Airbnb isn’t pulling its weight, you’ll be taxed as though it’s empty land — even if you visit every weekend. And that tax will climb each year.

Need help understanding how these rules affect your property contract or disclosure obligations?
As a licensed conveyancer, I can review your contract and flag where the 185-day rule or potential vacancy risk may require further consideration.
For tax-specific advice, please speak with your accountant.

Victorian Property Settlements – Trusted for over 25 years by Victorian buyers and sellers.
www.victorianpropertysettlements.com.au