Local councils to be given new powers to ban Airbnbs

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Local councils to be given new powers to ban Airbnbs

Local councils will be given controversial new powers to ban short-term accommodation including Airbnb in Victoria under a new tax Bill, as state governments across Australia grapple with shortages in affordable housing.

The Victorian government announced on Tuesday it would be introducing its long-awaited Short Stay Levy Bill – a new 7.5 per cent tax levied on short stay investments in metropolitan and rural areas – to parliament.

If approved, the Bill will come into effect on January 1, 2025, and according to the government, is aimed at encouraging investors to return properties to the long-term rental market while also boosting their return on investment.

Treasurer Tim Pallas said the Bill would hand councils powers to make “area specific decisions”, including “charges that are consistent with the arrangements” and restrictions on the number of days a property is listed.

He added that the Bill would also seek to reverse earlier plans by the then Andrews government to scrap council charges, meaning Airbnb operators could be slapped with both council and state government levy fees.

Camera IconTreasurer Tim Pallas said councils would be able to make ‘area-specific decisions’. NewsWire / Diego Fedele Credit: NCA NewsWire

The move faced pushback from the Victorian Tourism Industry Council (VTIC), which said, if rolled out, the Bill allowed the “potentially devastating impact of local councils applying their own tax on top of the state government levy”.

VTIC chief executive Felicia Mariani said there had been a lack of engagement with the tourism industry and urged for consultation to achieve the “outcome government is looking for without destroying an industry in the process”.

“There’s only three months now to figure out how this tax is going to work in practice and the government is relying on the short-stay systems to make changes in their systems they don’t have capacity for,” she said.

“Industry is now in a terribly exposed position, as councils have been given a green light to slap an additional tax on top of what is already in place, meaning this could end up being a 15 or 20 per cent tax in reality or more.”

data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==Camera IconByron Bay will introduce a 60-day cap on Airbnbs on September 26 NewsWire / Steve Holland Credit: News Corp Australia

State and local governments are seeking to clamp down on, or at least regulate, Airbnbs and short-stays, including in Brisbane where a new permit system was introduced this year for the city’s 4430 active listings.

The decision came after a taskforce examined the effect of the short-stay market and requires owners to seek planning approval for the permit in a measure hoped to force them to operate under greater accountability.

“While a large part of regulating short-stay accommodation falls outside the jurisdiction of local governments, I hope we can work with the state government to introduce sensible changes,” Brisbane Lord Mayor Adrian Schrinner said.

For its part, the Queensland government in an August 2023 review urged for the creation of a register of all “Airbnb, Stayz, and short-term rentals” that it said were concentrated in coastal areas of the Sunshine State.

A similarly timed review by the NSW government found thousands of homes sat empty most of the year, with local councils introducing caps on stays, such as in Byron Bay where a 60-day cap will begin on September 26.

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