The new Victorian Short-Stay Levy has become a major point of focus for short-term rental operators, hosts, and property managers. Introduced by the state government to support long-term housing and social initiatives, its rollout has raised many questions and uncertainties. 

At AuBnB, we’ve been actively following the developments and staying engaged with industry updates, most recently through a detailed webinar hosted by the Victoria Tourism Industry Council (VTIC). While the session provided helpful insights, it also underscored just how complex this new regulatory environment is. 

Here are the key takeaways that might come in handy for you: 

1. What Is the Short-Stay Levy and When Did It Begin?

Effective 1 January 2025, the Victorian Short-Stay Levy imposes a 7.5% tax on short-term accommodation bookings of less than 28 days. It applies to both new and amended bookings made and completed on or after this date.

The goal? The government is encouraging more housing stock to return to the long-term rental market and generate funds for affordable housing.

2. What Counts as a “Short Stay”?

A short stay is defined as continuous occupation of a property for less than 28 days. Importantly, if there are gaps in a longer stay, each non-continuous period may still be liable for the levy—even if the overall stay exceeds 28 days.

3. Exemptions: Complex and Confusing

While there are exemptions, they’re not always straightforward. Exempt properties include:

• Commercial residential premises (e.g., hotels, motels, hostels)

• Retirement villages and residential care facilities

• A property that is the owner’s Principal Place of Residence (PPR)

However, nuances abound:
A room within a PPR is exempt. But a granny flat or detached unit on the same property is not. Many operators are left questioning whether their property qualifies, especially those with unique setups or planning restrictions that prevent long-term leases.

4. How the Levy is Calculated: It’s More Than Just 7.5%

The 7.5% levy is charged on total booking fees—including GST and cleaning fees. If the levy is itemised as a separate line item, it becomes part of the total and is taxed again, increasing the effective rate to around 8.1%.

The best practice?

Do not itemise the levy on invoices. Instead, build the cost into your pricing and simply indicate that “prices include all applicable taxes and levies.”

5. Who’s Liable: Owner vs. Platform

Liability depends on how the booking is made:

• Direct bookings: The owner or tenant is responsible for registering, reporting, and paying the levy.

• Platform bookings (e.g., Airbnb): The platform provider is liable.

⚠️ However, if an owner wrongly claims a PPR exemption and it’s later challenged by the State Revenue Office (SRO), both the platform and the owner may be jointly and severally liable for the unpaid levy, penalties, and interest.

6. Reporting Thresholds and Due Dates

• $75,000 or more in annual booking revenue? → Lodge and pay quarterly

• Below $75,000? → Lodge and pay annually

All payments are due within 30 days after the end of the return period. This threshold includes all short stays either managed directly or through platforms.

7. In Uncertain Cases: Apply for a Private Ruling

If your property has unusual zoning, structure, or occupancy patterns, your best bet is to apply for a private ruling from the SRO. While the process is slow and requires precision, it offers some legal certainty.

Final Thoughts: Stay Ahead of the Curve

The Victorian Short-Stay Levy is here to stay, and it’s more than just a blanket tax—it’s a regulatory framework with layers of complexity and compliance obligations.

Whether you’re an individual host or managing multiple properties, it’s critical to:

• Stay up to date with the latest guidance from the State Revenue Office

• Keep detailed records of all transactions and communications

• Seek legal or accounting advice if you’re unsure of your exemption status

As a short-term rental management company, we understand the complexity and uncertainty surrounding the new Short-Stay Levy. At AuBnB, we’re closely monitoring updates, advising our clients on compliance, and helping them adapt pricing and record-keeping practices accordingly. 

While the legislation is still evolving, staying informed, maintaining accurate financial records, and seeking professional advice where needed will be key to navigating this new landscape with confidence.