Starting January 1, 2025, the Victorian Government will impose a 7.5% levy on short-term rental bookings—a move that many are already labeling a cash grab at the expense of both property owners and holidaymakers. This levy, touted as a measure to address housing affordability, raises significant questions about its true impact and fairness.
What Does the Levy Mean?
The new levy applies to stays of less than 28 consecutive days, covering all associated charges, including cleaning fees and GST. While property owners and managers are expected to comply, platforms like Booking.com have highlighted a lack of clear guidance from the State Revenue Office (SRO) regarding implementation.
At its core, this levy adds a significant cost to the holiday experience in Victoria. Families, couples, and individuals looking to explore the Mornington Peninsula, the Great Ocean Road, or other iconic destinations will find their accommodation bills noticeably higher. For example, a $1,000 weekend getaway will now cost an additional $75—money that might have otherwise been spent dining at local restaurants, visiting attractions, or shopping at small businesses.
A Blow to Tourism and Property Owners
This levy comes at a time when the tourism industry is still recovering from the impacts of the pandemic. Rather than supporting small businesses, regional economies, and the individuals who rely on tourism for their livelihoods, this additional tax risks discouraging visitors altogether. For property owners already grappling with rising interest rates, property taxes, and compliance costs, the levy adds yet another financial burden.
Many short-term rental hosts operate on thin margins, reinvesting earnings into maintenance, cleaning, and local services. The 7.5% levy not only cuts into these margins but also forces hosts to pass costs onto guests, making Victoria a less attractive destination compared to other states without such a surcharge.
The Bigger Picture: Revenue Grab or Real Solution?
Critics argue that the levy is less about addressing housing affordability and more about filling government coffers. With no clear indication of how these funds will directly benefit housing initiatives, the policy risks alienating both property owners and travelers.
Short-term rentals have long been a vital part of Victoria’s tourism ecosystem, offering visitors unique and diverse accommodation options. Penalizing this sector with additional taxes undermines its contribution to the state’s economy and could push more tourists to neighboring states or alternative travel options.
What Can Be Done?
- Advocate for Fairness: Property owners and tourism operators should voice their concerns through industry groups, local representatives, and public forums.
- Encourage Transparency: Demand clarity from the government on how the levy will be used to address housing issues and ensure funds are allocated to tangible solutions.
- Stay Informed: Keep up with updates from the SRO to understand your obligations and avoid potential penalties.
Final Thoughts
Victoria has long been a beacon for domestic and international travelers, offering world-class experiences in stunning locations. However, policies like the 7.5% levy risk tarnishing the state’s reputation as a welcoming destination. Rather than targeting holidaymakers and hardworking property owners, the Victorian Government should explore more equitable solutions to address housing challenges without jeopardizing tourism’s vital role in our economy.
It’s time to stand up against policies that place undue burdens on those who make Victoria vibrant, unique, and worth visiting.
