Warning over new Victorian 7.5 per cent consumer levy on all short-term property stays to fund social housing

Holiday-makers could escape paying an incoming levy in Victoria if short-term rental property owners ditch legitimate platforms, one of Australia’s most popular short-stay websites has warned.

In an Australian-first, the Victorian government is moving to impose a 7.5 per cent consumer levy on all short-term accommodation bookings with platforms such as Airbnb and Stayz from 2025 as part of a series of reforms.

Its housing statement also set a target to build 800,000 homes over the next decade, replace all 44 of Melbourne’s ageing public housing towers by 2051, close a rental bidding loophole and slash planning red tape.

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Stayz senior director Eacham Curry said the levy would not address industry regulation concerns and noted most short-term rentals weren’t in areas with the greatest housing need.

“The 7.5 per cent increase means owners need only remove themselves from listing on platforms to avoid paying the levy, and the Victorian government may end up getting nothing at all,” he said.

The levy gives hotels a free kick and a figure in line with international standards between three to 5 per cent would have been more appropriate, Airbnb Australia and New Zealand’s head of public policy Michael Crosby said.

“A rate this high could have a negative impact on the appeal of Victoria as a tourism destination, also penalising everyday Victorians seeking a local holiday when many are already grappling with the cost of living,” he said.

The Victorian Tourism Industry Council fears the levy will stall the state’s recovery from the COVID-19 pandemic, pointing out tourism spending in regional areas already slumped 21 per cent in May compared to the same time last year.

“Why are consumers who support the state’s critical visitor economy being asked to fund the government’s social housing policy,” the peak body’s chief executive Felicia Mariani asked.

Premier Daniel Andrews conceded the levy would not be universally popular but expects the “modest” charge to raise $70 million a year to build and maintain social housing.

In a bid to speed up planning assessments, the planning minister will assess developments worth more than $50 million in Melbourne and $15 million in regional Victoria instead of local councils.

The only condition is, developers will have to set aside at least 10 per cent of the total homes as affordable housing to be eligible.

The Municipal Association of Victoria, a peak body that represents 79 councils across the state, said it was not consulted on the changes and questioned the flexibility of the minimum requirement.

“Communities will rightly be concerned that the minister has been given the power to reduce or remove this requirement with no guidelines around when that would be appropriate,” deputy president Joseph Haweil said.