Victoria to charge 7.5% levy on Airbnb prices

In Victoria, short-stay lodging that is offered by firms such as Airbnb might be subject to a fee of up to 7.5% under a proposal that will be presented to the state cabinet the following week. This idea is an Australian first.

It has been revealed by media Australia that a consumer-facing fee on short-term stays would constitute a crucial feature of the Victorian government’s housing statement, which is scheduled to be released as soon as the next week.

The possibility of a tax of 7.5% was initially mentioned in a piece by the Age.

According to the website Inside Airbnb, which provides data regarding the impact that the short-term rental platform has had on residential neighbourhoods, there are 23,185 Airbnbs in the greater Melbourne area, 7,050 in the Barwon South West region, and 4,721 on the Mornington Peninsula. All of these numbers are based on the number of listings on the website.

According to data provided by Inside Airbnb, a 7.5% tax would result in an increase of approximately $17 per night to the average price of a short-term rental in metropolitan Melbourne (which is presently $231), $29 to a stay in Barwon South West (which is currently $381), and $42 on the Mornington Peninsula (which is currently $557).

Although Inside Airbnb does not include all of Victoria and Airbnb has contested the accuracy of the data that it collects, a charge of this kind might bring in at least $42 million yearly for the state government. Inside Airbnb does not include all of Victoria.

Michael Crosby, the head of public policy for Airbnb in Australia and New Zealand, stated that while the company was in favour of a levy to fund community infrastructure and services, 7.5% was “too high” and would “give hotels a free kick and create an uneven playing field.” Crosby claimed this despite the fact that Airbnb was supportive of the levy.

A rate that high could have a negative impact on the appeal of the state as a tourism destination, as well as penalizing everyday Victorians at the wrong time,” he added. “A rate that high could have a negative impact on the appeal of the state as a tourism destination.”

“We believe that a levy somewhere between 3 [and] 5%, which is in line with international policies, would be appropriate.”

The housing policies of the state are anticipated to be examined by the expenditure review committee of the state before the cabinet meets on Monday, according to a cabinet minister.

Then, on Tuesday, it is anticipated that the Premier, Daniel Andrews, will announce a range of measures to enhance housing supply. These measures will include changes to planning regulations to speed up the approval process and limit the authority of councils to object to significant constructions.

Due to the exclusion of other areas of the tourism business, including hotels, another minister suggested that the Airbnb tax may be as high as 7.5% of the host’s total revenue.

Stayz, a company that provides accommodations for short stays, has stated that a high levy that is targeted solely at the sector is “ill-conceived” and puts up to $1.5 billion in economic value to the state as well as 9,500 jobs at risk.

“Imposing a consumer-facing levy on short-term stays that could be as high as 7.5% does not represent the best or most equitable way to address concerns around the impact of short-term accommodation,” said Eacham Curry, director of government and corporate relations for Stayz. “This would not be the best or most equitable way to address concerns around the impact of short-term accommodation.”

“Nor should the short-term accommodation sector be painted as the cause of or solution to the housing crisis that Victoria is currently facing.”

However, Samantha Ratnam, the leader of the Victorian Greens, stated that any kind of levy has to be coupled with a limit of ninety days on short-stay listings.

“Strong short-stay regulations in Victoria would force owners to make homes available as long-term rentals or for owner occupiers,” she said. “This is actually what is needed right now to increase rental supply, rather than simply increasing the price of holidays.” Short-term rentals is increasingly popular in recent years.

Ratnam stated that numerous locations all over the world had already implemented limitations, one of which was for 180 days in Sydney and other areas of New South Wales (NSW), while other cities such as London and San Francisco had implemented caps for 90 days.

Sam Groth, who represents the opposition on matters pertaining to tourism, referred to a tariff on short stays as a “tourism and holiday tax.”

“Victorians who work hard to afford a weekend away shouldn’t be the ones to pay for the Andrews government’s record debt or to fulfil a global company’s social responsibility,” he said. “They shouldn’t be the ones to pay for the record debt or to fulfill a global company’s social responsibility.”

Adding yet another tax to Victoria’s already nation-leading property taxes will only drive critical investment interstate, and it will do nothing to address the fundamental causes of Victoria’s housing affordability crisis.”

“We know there’s no more important issue than housing – that’s why we’re working hard on a housing package and will have more to say soon,” said a spokeswoman for the government. “We know there’s no more important issue than housing.”

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