Victorian families and group travellers to pay the bulk of new short stay tax, Airbnb claims

The head of public policy for Airbnb Australia has made a big claim about the tax amid fears a holiday rental black market will emerge.

Victorian families and group travellers will pay the majority of the Andrews government’s new short stay rental tax, Airbnb has claimed.

Head of public policy for Airbnb Australia and New Zealand, Michael Crosby told news.com.au: “Victorians will pay this tax, two-thirds of Airbnb stays in Victoria are booked by Victorians”.

Head of public policy for Airbnb Australia and New Zealand Michael Crosby.

He added that the bulk of the $50-75 million a year forecast to be raised by the new 7.5 per cent levy on short stay accommodation will be borne by families and groups that tend to stay in apartments or houses, rather than business travellers who stay in hotels.

Hotel stays are excluded from the tax, which will be introduced from January 1, 2025 and the government confirmed to news.com.au that serviced apartments were also excluded.

Mr Crosby said it was “inapproriate and disappointing” that some property types had been excluded.

He said that if the levy was set at a lower amount of three to five per cent of the nightly rent but applied to all types of short term accommodation, not only would each traveller pay less but the government would raise more money overall to pay for more affordable long term rental accommodation in the state.

Mr Adipoetra Halim, owner of the The Windsor Hotel, which has been excluded from the levy, along with other hotels.

Eacham Curry, senior director of government and corporate affairs at rental platform Stayz, told news.com.au that he was not surprised hotels had been left out of the scheme as the Australian Hotels Association has “deep pockets and aren’t afraid to splash money around to get what they want”.

He added that many properties listed on Stayz are in areas not serviced by hotels or are larger properties that appeal to extended families or groups, and that the platform was catering to parts of the market underserved by the hotel industry.

Among the criticisms of the new tax, which will be collected from platforms such as Airbnb and Stayz but paid by travellers and holiday makers, is that it will encourage the development of a black market for holiday accommodation.

This would see owners use platforms for advertising their properties but take bookings and payments offline, bypassing the collection of the levy as well as GST.

Mr Curry said that is something that already happens, a phenomenon Stayz calls “the billboarding effect” and added that it was “very likely” that the new levy would see the practice increase.

He said Stayz was “obviously” concerned about the potential to lose revenue should the short stay black market grow.

Stayz corporate affairs director Eacham Curry.

Mr Crosby agreed that the levy needed to be collected from smaller operators and not just large platforms — a key reason why Airbnb had been advocating for the government to establish a registration scheme for short stay accommodation providers.

He said a registration scheme, which has been ruled out by the government, would also help the government to make “evidence-based housing decisions”.

But Mr Crosby said owners who were thinking of taking their properties off sites such as Airbnb and renting them directly to avoid the levy should remember that “the levy is paid by the guest”.

When questioned about the development of a holiday rental black market, a government spokesperson told news.com.au: “The State Revenue Office will collect this levy, and will be responsible for ongoing administration, policy oversight, compliance and education.

“We expect platforms will comply with their tax obligations.”

Platforms hit out at the ‘inappropriate and disappointing’ short stay tax. Picture: Tony Gough

The platforms have also criticised the Andrews government for a lack of engagement with them over the development of the scheme.

Mr Curry revealed that in initial talks with the government yesterday, following the announcement, government officials were not aware that there were more platforms operating in the short stay rental space beyond Airbnb and Stayz.

“[The black market issue] highlights why it’s really important for government to work in consultation with industry in its implementation phase,” Mr Crosby said.

The government spokesperson told news.com.au: “The Treasurer will convene a working group to consult on implementation.”