On 29 October 2024, the Victorian Government enacted the Short Stay Levy Act 2024, introducing significant changes to the short-term accommodation sector.
Effective from 1 January 2025, this legislation imposes a 7.5% levy on short-stay bookings in Victoria aimed at addressing the ongoing housing affordability issues.
Here’s what property owners need to know about the levy:
When Will the Levy Apply?
The levy will only apply to bookings made and completed on or after 1 January 2025.
The levy will not apply to bookings made before 1 January 2025, even if the stay is completed on or after 1 January 2025.
What Defines a ‘Short Stay’ and How Is the Levy Calculated?
A short stay refers to a stay of less than 28 days in a property where a fee is charged. The levy will be calculated as 7.5% of the total booking fee, including:
- Booking fees
- Cleaning fees
- GST (where applicable)
The levy does not apply to credit card processing fees which may be charged.
Which Properties Are Subject to the Levy?
The levy will apply to a short stay in accommodation such as an entire house and apartment, a private room in a house, a granny flat or other separate residence (even if located on the same land as a person’s principal place of residence) and a tiny home parked on land. It will not apply to a stay in a hotel, motel or similar.
The levy will not apply to a short stay in someone’s principal place of residence. For example, if you list your property for short stay bookings while you’re away on holidays, any short stays would not be liable for the levy.
There are further property exclusions such as accommodation provided for the use of employees, student accommodation and rooming houses, retirement villages, residential care facilities and supported residential services.
Registration, lodgement and payment details
Where the property’s bookings are facilitated solely via a booking platform, the booking platform will be responsible for attending to registration, lodgement and payment of the Short Stay Levy with the State Revenue Office.
Where short stay bookings are facilitated without a booking platform, the property owner(s) will need to register with the State Revenue Office.
The frequency for reporting and payment to the State Revenue Office will be dependent on the annual booking fees collected, as follows:
- For booking fees of $75,000 or less – annual reporting and payment i.e. for the period ended 31 December; or
- Greater than $75,000 – quarterly reporting and payment.
Registration with the State Revenue Office will be required before the due date of the first return.
What’s Next?
Further details about registration, reporting, and payment processes will be published by the State Revenue Office.
For more information, visit the official State Revenue website: State Revenue Office – Short Stay Levy.
Please do not hesitate to contact your Blaze Acumen advisor if you would like to discuss any of the issues raised in this Client Alert.