Warning issued over dodging new short-stay rental levy

Short-stay accommodation providers slapped with levy

Those who try to escape paying an incoming levy on short-term rental properties in Victoria will be caught and forced to pay up, Victorian Premier Daniel Andrews says.

In an Australian-first, the Victorian government will impose a 7.5 per cent consumer levy on all short-term accommodation bookings with platforms such as Airbnb and Stayz from 2025 as part of a series of reforms.

The state government’s housing statement also sets a target to build 800,000 homes in the next decade, replace all 44 of Melbourne’s ageing public housing towers by 2051, close a rental bidding loophole and slash planning red tape.

Eacham Curry, senior director of government and corporate affairs at Stayz, has blasted the plan as “half-baked” and “policy on the run”. He has also questioned how it will be policed.

On Thursday, Mr Andrews rejected the idea that renters and property owners could find a way around paying the fee by turning to illegitimate platforms instead.

“There are many different ways in which people try to avoid paying tax and the State Revenue Office are expert in finding those people and making sure that people do pay their fair share,” he said.

“If you’re eligible to pay the tax, then you will be paying that tax.”

Airbnb Australia and New Zealand’s head of public policy Michael Crosby said the levy gave hotels a free kick and a figure in line with international standards of 3-5 per cent would have been more appropriate.

“A rate this high could have a negative impact on the appeal of Victoria as a tourism destination, also penalising everyday Victorians seeking a local holiday when many are already grappling with the cost of living,” he said.

The Victorian Tourism Industry Council fears the levy will stall the state’s recovery from the COVID pandemic, pointing out tourism spending in regional areas already slumped 21 per cent in May compared to the same time last year.

“Why are consumers who support the state’s critical visitor economy being asked to fund the government’s social housing policy?” chief executive Felicia Mariani said.

Mr Andrews conceded the levy would not be universally popular but expected the “modest” charge to raise $70 million a year to build and maintain social housing.

In a bid to speed up planning assessments, the planning minister will assess developments worth more than $50 million in Melbourne and $15 million in regional Victoria instead of local councils.

The only condition is developers will have to set aside at least 10 per cent of the total homes as affordable housing to be eligible.

The Municipal Association of Victoria, a peak body that represents 79 councils across the state, said it was not consulted on the changes and questioned the flexibility of the minimum requirement.

“Communities will rightly be concerned that the minister has been given the power to reduce or remove this requirement with no guidelines around when that would be appropriate,” deputy president Joseph Haweil said.

– with AAP

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