Airbnb hosts face Vic tax and apartment bans

Victoria is reversing its open slather policy on short-term holiday lets with new regulations to come into force at the start of next year that will tax holiday lets and allow owners corporations and local councils to restrict or ban them.

And the rumour is that NSW policy wonks are watching closely to see if they can fill some holes in the state’s housing budgets with a similar tax. If they do, it would represent commercial karma for the holiday let platforms that have driven renters out of affordable homes so they can be let more lucratively to tourists.

According to a story in The Age newspaper, the Victorian government first announced the 7.5 per cent levy last September in response to the state’s crisis in housing supply and affordability.

Now, having negotiated support from the Greens, it is also planning to allow a super-majority of 75 per cent of owners in apartment blocks to pass by-laws banning short-term holiday lets, although that will exclude apartments that are the owners’ principal places of residence.

According to the Age, the Victorian government said there were around 63,000 short-stay properties in the state, almost half of which were in the regions. About 50,000 of those places were entire homes that could theoretically be on the long-term rental market instead.

On Tuesday, Treasurer Tim Pallas said the purpose was to bring more housing onto the long-term rental market, but he could not say how many properties were likely to switch to residential rentals.

The idea is presumably to reclaim for residential lets properties where hosts feel the reduced profits or increased efforts required to entice guests at higher rates aren’t worth the effort and hassle.

Revenue from the levy, expected to raise about $60 million a year, will go to Homes Victoria to support social and affordable housing.

“It is important that we give a signal to the market that our priority is to get people into homes, and long term secure rental accommodation is important,” Mr Pallas said.

Four Victorian councils have their own Airbnb charges, meaning some short-stay homeowners could be double-charged.

Victoria Tourism Industry Council chief executive Felicia Mariani told the Age this would be devastating for local tourism.

“There’s only three months now to figure out how this tax is going to work in practice and the government is relying on the short stay systems to make changes in their systems they don’t have capacity for,” Mariani said.

“On top of that… local councils have been given a green light to slap an additional tax on top of what is already in place, meaning this could end up being a 15 or 20 per cent tax in reality, or more.”

Greens rental rights spokeswoman Gabrielle de Vietri said the negotiated reforms would go some way to stopping property investors “hoarding homes for profit”.

“Communities across Victoria are sick to death of property investors snapping up homes to cash in on Airbnb while locals struggle to find somewhere to live,” de Vietri said.

Opposition tourism spokesman Sam Groth had labelled the levy a tax on tourism and Liberal Leader John Pesutto said it was an impost on families who were already doing it tough.

“Why would you make it harder on Victorians and Victorian families just to take a much-needed holiday once or twice a year?” Pesutto said.

Housing Industry Australia chief economist Tim Reardon said the bill would not improve housing supply and described is as an own goal.

The ability for apartment owners to pass by-laws banning airbnbs brings Victoria into line with NSW. But this will be of no benefit to the notorious blocks in Melbourne’s city centre and the Docklands area where it’s estimated that more than one third of apartments in some schemes are short-term holiday lets.

You can read the full report  from the Age for free HERE (if you are a first-time reader).