Airbnb gears up to fight Victoria's short-term rental tax

The bill proposes to impose a tax of 7.5 percent from 1 January 2025. All revenue from the tax – estimated to total around $60 million per year – will be used to create social and affordable housing through Homes Victoria.

In addition, the new laws would give homeowners associations the ability to ban short-term accommodation in their housing developments if 75 percent of households agree, and allow local councils to enact their own short-term accommodation regulations.

Airbnb, which advised on the plan, called the bill a “disappointment” and accused the government of failing to deliver on its promise in the Victorian Housing Strategy to create “a simple set of rules” for Victoria's short-term accommodation sector.

In an open letter to hosts in the state, the rental platform said it had “not been adequately consulted on the changes” but promised to push for changes before the law is passed.

Before the draft bill was published, Airbnb had called on the government to reduce the levy to 3 to 5 percent while applying it to all accommodation establishments such as hotels. The company said the move would “generate more revenue but cost travelers less.”

In addition to the amount of the tax, Airbnb has raised serious concerns about the state's decision to give municipalities the power to regulate short-term accommodation separately.

“This could lead to up to 79 different regulations being imposed by municipalities, leading to more bureaucracy and uncertainty,” the platform’s letter says.

“If local governments consider restrictions or caps, this could reduce the choice and affordability of accommodation options in the tourism sector. There is no evidence that these measures improve the availability or affordability of rental housing,” it added.

Due to the decision to involve local authorities in the matter, Airbnb accused the legislation of “creating confusion” but sought to reassure users of the platform in the state of Victoria that the company would “work tirelessly to advocate for your needs and interests”.

“We want to assure you that we will continue to work with the government as the bill moves through Parliament to advocate for meaningful and evidence-based changes to the bill,” the technology company said.