Airbnb calls for Melbourne city hotels to be hit with short-stay tax

Airbnb is calling for the Victorian government to expand a short-stay property tax to city hotels and all accommodation providers but the government has dismissed the suggestion.

Airbnb has called for a Victorian government-imposed tax on short stay properties to be expanded to hit all accommodation providers, including city hotels.

Speaking at a breakfast event on Wednesday to unveil new economic figures, Airbnb’s Australia and New Zealand head of public policy Michael Crosby also said the tax should be scaled based on the cost of a nightly stay.

Former premier Daniel Andrews last month unveiled a wide-ranging housing statement, which included a 7.5 per cent tax on short-stay properties on host platforms like Airbnb and Stayz.

Revenue from the tax will be used to fund social and affordable housing builds in an attempt to curb the housing crisis.

Mr Crosby said the Victorian government will soon create an industry working group to devise exactly how the levy will work.

Airbnb has called for a Victorian government-imposed tax on short stay properties to be expanded to hit all accommodation providers, including city hotels. Picture: iStock

“It’s difficult to see how the levy will actually result in an increase in the properties available to long term rentals across the state,” he said.

“We have a number of questions about how they will implement the scheme and how the nuts and bolts will fit together.”

Mr Crosby said Airbnb supported the concept of using the tax to build new housing projects.

“We think that’s a very worthy aim – that’s a good thing for the government to actually earmark this revenue for new homes,” he said.

“But we have said that the levy would raise a lot more and cost consumers less if it was completely accommodation agnostic and apply to any form of accommodation.”

Mr Crosby said other states were closely monitoring Victoria’s tax, and hadn’t yet ruled out implementing similar measures.

“The issue we have is we want to make sure … if there is that negative impact as a result of the levy, that state governments are aware of that as well,” he said.

But Tourism Minister Steve Dimopoulos said the government would not consider Airbnb’s request.

“Of course not,” he said.

“Airbnb provides a valuable service to many communities across Victoria but it also does take away housing stock. The purpose of that levy on Airbnb was to shift a little bit of the market back to what people need, which is a home to live in.

“It has no relevance to regulated accommodation. They provide a completely different service.”

It comes as new research from Oxford Economics revealed that Airbnb contributed $13.6bn to Australia’s gross domestic product, including $3.7m in Victoria alone.

The data also revealed the short-stay provider supported almost 95,000 jobs nationwide — including 26,000 in Victoria — in the year to March 2023.

Head of public policy for Airbnb Australia and New Zealand Michael Crosby says other states are closely monitoring Victoria’s tax.

Oxford Economics Australia head of consulting Kristian Kolding said Airbnb played a major role in the rebooting of the tourism sector in the wake of Covid.

“Airbnb has been at the heart of some of the trends reshaping the nation’s travel and tourism industry, including the shift in travel away from cities and towards more rural communities,” he said.

“Domestic travellers have been crucial to the tourism sector’s resilience over the past three years as Aussie guests saw opportunities in domestic travel as a substitute for international holidays, with self-drive and regional trips increasing in popularity which led to a wider dispersion of tourism spend outside the traditional or ‘popular’ destinations in Australia.”

Airbnb’s Australia and New Zealand country manager Susan Wheeldon said hosts on Airbnb were helping to expand tourism opportunities.

“The economic benefits are being shared across more destinations, enabling a valuable economic contribution to rural and regional areas,” she said.