Victorian Short-Stay Levy is now law
In September, the Victorian Government announced a new levy on short-stay accommodation. That levy became law on 29 October 2024.
Although the levy itself received plenty of media attention at the time, there are some finer details that are worth noting and which have largely escaped attention.
What is the short stay levy?
The new law imposes a flat 7.5% levy on bookings for certain types of Victorian accommodation for stays of less than 28 days.
The 7.5% is calculated on total fees paid (including GST and cleaning fees) but excluding credit card fees. The levy will be collected by either the booking platform, or by the property owner where they do not use a platform.
The levy will not apply to bookings for a property where that property is someone’s principal place of residence. That is to say that if you list your home while you are away on holidays, the arrangement will not be subject to the levy. Similarly, if you let out a private room in your home, that arrangement will also not attract the levy. However, a granny flat or separate freestanding residence on the same land as your PPR will attract the levy.
The levy does not apply to hotels, hostels and similar accommodation.
Transitional Arrangements
One interesting point to note is that, even though the levy comes into effect from 1 January 2025, it will not apply to bookings that were made before this date even if the stay is completed later on.
It might therefore be a good idea to book next year’s visit to regional Victoria before the current year is out.
Amendments to Owners Corporations Act
The Short Stay Levy Act 2024 also makes some changes to the Owners Corporations Act 2006.
Importantly, these changes permit owners corporations to make rules prohibiting the use of lots as short-stay accommodation. These rules must be passed by special resolution.
Given anecdotal reports of short stay accommodation sometimes causing significant disruption in apartment buildings, this may be a welcome development for all people who live in or own property in such complexes. It should be noted that the prohibition on short stay accommodation will not apply to people who use those premises as their PPR. In other words, people will still be able to let out their apartments while they are away on holiday, provided that apartment is where they normally live.
Aintree Group Legal will be happy to discuss all of your leasing needs. Contact us today.
