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Another major tourist destination has joined the growing list of world cities cracking down on internet-based holiday letting hosts and their online agencies – like Airbnb and Stayz – saying hosts who benefit from their tourism marketing should pay their share of taxes too.
Vienna this week passed new laws making it compulsory for anybody renting out accommodation to visitors – commercially or privately – to report it to authorities. Failure to do so could lead to fines of $3000 (2,100 euros).
And, just to make sure no one slips through the net, online rental agencies will also be obliged to identify hosts as well as the addresses of their rented accommodation.
That has led to criticism that this is more about creating a database of short-stay landlords, with a view to future regulation, than a revenue raising exercise. The tax is, after all, only 3.2 per cent.
The crackdown on holiday let tax dodgers is in stark contrast to our state capitals’ attitudes. City of Sydney, in its submissions to the current NSW government inquiry into holiday lets, has given the thumbs-up to whole unit holiday rentals in residential apartment buildings.
City of Melbourne is less keen but the Victorian government is about to enact laws allowing unlimited short-stay lets in residential blocks, albeit with a three-strikes rule for proven bad behaviour.
In both cities, even if authorities wanted to tax short-stay landlords, they’d have to scour the internet, trying to identify tax dodgers from their online advertisements.
In contrast, in the Austrian capital all landlords – including online holiday let hosts – will be obliged to provide all the information necessary to establish any tax liability.
The provincial government of Vienna regulates the tourist industry there – including a local accommodation tax – through the Vienna Tourism Promotion Act. This tax, 3.2% of the net cost of accommodation, is paid by the guest and applies to both commercial and private accommodation.
The amendment passed on September 30 stipulates that landlords must provide the city with the addresses of all accommodation used by tourists within two weeks so that tax can be levied correctly.
“Vienna’s credo when it comes to sharing economy is: fair play rather than prevention,” says Vienna’s Director of Tourism Norbert Kettner. “Thanks to this legal clarification, Vienna has now created the basis for transparent competition as well as legal certainty for accommodation providers previously operating in a grey area.
“Vienna is committed to the diversification of its tourism offerings, but the same rules must also apply to all market players: the same rules, and the same taxes for all those benefiting from the tourism advertising financed by the local accommodation tax.”
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
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Well spotted, Jimmy.
Accommodation taxes have never really taken off in Australia, for many reasons. So the possibility of an accommodation tax being introduced in New South Wales is remote.
That’s not to say that the Australian Taxation Office is sitting idle – the same as it has the power to order banks to provide details of interest paid to its customers, it has the power to order AirBnb, Stayz, and other internet hosting services to provide details of its Australian hosts, and how much they are being paid. This income is of course taxable.
And it’s not to say that owners corporations should sit idle – the extra wear and tear on the common property, higher insurance levies and extra garbage charges need to be paid for and the best way to do so is for owners corporations to impose a short-stay service levy on owners of short-stay apartments. But there are legal hurdles. Except for the recovery of extra insurance levies arising from a particular use of the strata lot. which is permitted under section 82 of the Strata Schemes Management Act 2015, a legislative amendment would be needed to authorize an extra levies for owners of short-stay apartments for wear and tear and garbage charges.
Alas, I suspect this won’t work.
A leading Sydney Barrister who is heavily involved in all things Strata has said that the Lot owner is inviting the ‘guest’ to the building and into the Lot so the ‘guest’ has the right to cross and use common property to access the Lot.
To interfere in any way would probably expose oneself to charges of harassment etc.
And the State Government, should they cave in to the City of Sydney’s recommendations that short-term lets be deemed ‘exempt development’, will have to explain away the City of Sydney’s successfull arguments in the NSW Land and Environment Court and the Court’s repeated and consistent judgments that mixing short-term lets with permanent residents is “fundamentally incompatible”.
What are the chances of the State Government giving equal access to our Residential Housing to the Gaming and Liquor and Sex Industries? Why limit short-lets of housing to Airbnb/Stayz/their clones?
Hi Jimmy,
That is exactly what my building has done.
If any non registered person is using a swipe card it will immediately cancelled.
Millie may be correct about the legal standing but by the time it goes to NCAT & a order made, it will be months.
The building did this to a resident renting his unit via airbnb & the resident vacated as it was going to cost too much in lost airbnb earnings before a NCAT order was made.
Simple, effictive and brilliant! And damned cheap and quick.
A certain charman of a particular (parliamentary) committee has been asked how we will all, every single one of us, be compensated if changes to legislation mean the Titles and Planning Instruments on the property we have purchased – particularly strata and certainly Development Consents issued by the City of Sydney – are altered to permit the short-term letting cowboys access. This has particular relevance when the Instruments and Titles that we hold very clearly exclude short-term lets.
Plus he’s been asked if the gaming and liquor and sex industries will also receive unlimited, unregulated and untaxed access to our residential housing. No reply as yet.
Where people will be expected to live if there’s no such thing as a Residential zone?
I feel a major campaign just around the corner.
There’s a quote usually attributed to a certain Mark Zuckerberg, often held up as an example of a successful innovator in the social economy,
“Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.”
He and his companies have since moved away from using it so often for some reason or other.
The actions of the sharing economy sector appear to show they still firmly follow this ethos.
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