When it comes to short-term holiday rentals (STHLs), the NSW Government is trying to balance two conflicting priorities, writes property and business lawyer Tony Cordato.

One aim is to promote the tourism economy by making short-term rental accommodation available to holiday makers and visitors.

The other need is to address the housing crisis by making long-term rental accommodation available to permanent residents.

But the most remarkable aspect of all this is that, given the hot mess it has created for itself over the years, as online booking agencies Airbnb, Stayz and Booking.com have expanded and infiltrated the housing market, the state government has no immediate plan to change anything.

For anyone who’s confused Tony has summarised the current position (some would say shambolic state) of NSW policy and law when it comes to STHLs:

• Residential tenancy law does not apply to short-term rentals because they last for less than 3 months at a time
• Only houses, home units and granny flats can be used for short-term rental accommodation – they must have been built or approved as residential accommodation
• The rules are loose for hosted accommodation. This is where an owner is residing at the property when renting a spare room. Interestingly, a granny flat can be the spare room.
• The rules are tight for non-hosted accommodation. This is where an owner is not residing at the property, either by making their home available while they are away, or a holiday flat or house made available year-round.
• A day cap – a limit on the number of days in a year in which a property can be let for STHLs – applies for non-hosted accommodation in the Greater Sydney Region, Ballina Shire, Muswellbrook and Clarence Valley areas of 180 days in a 365-day period. Byron Shire has its own day cap of 60 days . Elsewhere in NSW, there is no day cap.
• Strata unit blocks and strata townhouses can ban short-term rental accommodation if it is non-hosted.

These requirements apply to a property used for Short-Term Rental Accommodation (STRA): it must meet fire safety standards (such as smoke alarms), it must be registered on the STRA Register and the STRA Code of Conduct must be observed.

You can read Tony’s comprehensive guide to the complexities of holiday letting legislation in NSW at this link