Victoria’s New Short-Stay Accommodation Tax: What to Expect

Victoria is set to introduce a 7.5% levy on short-term rental accommodations starting 1 January 2025, with revenue earmarked for social and affordable housing through Homes Victoria. While the tax aims to address housing affordability, it also includes new regulations that could impact both property owners and local councils.

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Key Points of the New Legislation

1. Financial Impact

The 7.5% tax could increase costs for short-term rental hosts, potentially leading to higher prices for guests and reduced demand. Property owners might also be pushed out of the market, affecting the availability of short-term rentals.

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2. Stricter Controls

Owners’ corporations will gain the power to ban short-term rentals if 75% of owners agree, which could lead to widespread restrictions in apartment buildings. This may limit accommodation options and affect the flexibility of stays.

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3. Local Regulations

Local councils will be able to set their own rules for short-stay accommodations, potentially creating a patchwork of regulations that could confuse property owners and guests.

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4. Impact on Tourism

The new tax and restrictions might deter tourists and reduce the appeal of Victoria as a travel destination, potentially impacting the local economy.

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Balancing Act

While the tax aims to fund affordable housing, it’s essential to consider its broader implications. Striking a balance between addressing housing needs and maintaining a robust short-term rental market will be crucial as the legislation moves forward.

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