Andrews government considering a tourism levy on short term stays like Airbnb, making it millions

The Andrews government is considering introducing a charge on short term rental and hotel stays, in a move that would inject tens of millions of dollars into its coffers.

The Andrews government is considering a tourism levy on short term stays in Victoria.

The Sunday Herald Sun can reveal the charge on short term rental and hotel stays is on the cards, with prices floated of up to $5 a booking, injecting tens of millions of dollars into government coffers.

The proposal is part of a suite of reforms being considered to ease the housing crisis with revenue being funnelled into affordable housing as part of its suite of planning reforms due to be announced in September.

Rental heavyweight Airbnb say it wants the charge, for all short-term accommodation, alongside a new code of conduct and a register of properties on the market.

As housing affordability becomes a key issue across Victoria, the state government is looking at reforms to short-term stay.

The Andrews government is considering a tourism levy on short term stays in Victoria. Picture: David Caird

Labor MPs have pushed for caps on short-term stays and higher taxes, so stop houses being used for AirBnbs and free them up for full time occupancy.

But the new one-off charge for each booking is under consideration and has featured in discussions as an alternative.

This could generate millions of dollars in revenue across the nearly 60,000 rooms available, which could then go towards local projects such as social or affordable housing.

It remains unclear whether the levy, if adopted, would be collected and spent by the state and if different councils could opt-in or out of the idea depending on their needs.

It could also apply across a range of properties, ranging from those available on Airbnb to hotel rooms or other holiday rentals.

Airbnb’s head of public policy Michael Crosby said the company supported a tourism levy and already collected billions in charges around the world that went back to communities.

“A tourism levy would mean every short-term rental booking made in Victoria helps contribute to the community,” he said.

The levy would inject millions into government coffers. Picture: Supplied

“It would work by charging the guest a small fee, about the cost of a cup of coffee, at the time of booking rather than hosts being slugged with higher council rates.

“We have worked with many cities around the world to make this visitor levy work, remitting $USD7-billion in taxes globally to support much-needed community infrastructure, housing projects and services.”

“Airbnb’s vision is to ensure as many people as possible benefit from tourism

Mr Crosby said a statewide register of short-term accommodation would let government make “data-based policy decisions by having a clear view of the entire visitor economy”.

It could work alongside a mandatory code of conduct, like that introduced in NSW, which could also ban dodgy owners or badly-behaved guests who were upsetting local residents.

Daniel Andrews on Sunday would not confirm whether an Airbnb and short-term stay levy would be introduced but said a major housing policy “shakeup” would be announced soon.

“There is nothing more important than getting more supply into our housing market,” he said.

“Everything is on the table, there’s a very long list of different policy approaches, different things we can. We’re shortening that list down … and we’ll have more to say in couple months’ time.”

The premier also refused to rule out limiting rental increase to once every two years, up from the current one-year limit.

“I’m not ruling out further and further changes, all those things are on-foot,” he said.

A government spokesman said there was currently “no more important issue” within Victoria than housing.

“Ahead of the Housing Statement to be released later this year – and in addition to our Big Housing Build – we will provide a new $1 billion Regional Housing Fund to deliver more than 1,300 new homes across regional Victoria.”

“Whether it’s housing supply, first homebuyer affordability, public housing or renters’ rights – the housing system needs reform. We’re working hard on the package and will have more to say in due course.”

Opposition housing spokesman Richard Riordan said any sort of tourism levy should go to local community land trusts rather than the state government.

“These bodies need local control and direction and could be funded by a modest nightly levy on accommodation provided through the non-commercial online accommodation services.

“At the moment the Andrews Government has toyed with this idea, but they seek to claim the money presumably to offset their enormous debt issues, and again it will see the regions taxed in order to deliver projects in Melbourne.

“What regional Victorian tourism needs is fund that is generated and spent locally to help improve the service and liveability of some of the best places to visit in Australia.”