Adelaide City Council identifies 602 short-stay properties to pay higher rates, if draft budget is approved

Adelaide City Council plans to charge one group more in rates, and other councils are expected to be watching closely.

More than 600 short-stay providers – some earning $31,000 a year – will be targeted by Adelaide City Council as it looks to become the first in SA to charge them higher rates.

Lord Mayor Jane Lomax-Smith believed other councils would follow suit to charge a different rating method to providers offering 90 nights or more a year in accommodation.

“Councils will be looking to Adelaide to see what we do,” Dr Lomax-Smith said.

“I think it’s inevitable our rating changes will be picked up by other parts of the state.”

An external report found the council had 934 short-stay accommodation providers, such

as Airbnb and Stayz, but only 602 properties met its proposed 90 night threshold.

Lord Mayor Dr Jane Lomax-Smith believes it’s ‘inevitable’ other states will pick up SA’s rate changes to short-stay providers.. Picture: Emma Brasier

For those properties the average nightly rate is $201 to $238, with 401 providers offering more than 180 days of accommodation a year with an average income of $31,667.

The council’s draft annual business plan has proposed these properties be deemed ‘commercial-other’ and pay 22 per cent more on top of their rates – about an extra $450.

Properties with a permanent tenant, but a room rented short-term would not be included.

“If you have an asset class for the sole purpose of investing for short-term accommodation that is a commercial operation and that commercial operation shouldn’t get a 20 per cent reduction in rates,” Dr Lomax-Smith said.

It follows similar schemes interstate, including Brisbane City Council which charges 50 per cent more in rates and Hobart City Council which doubled its rates for short-stay providers.

Victoria will next year introduce a 7.5 per cent levy on revenue collected by providers, with Melbourne, Sydney and soon-to-be Perth also requiring hosts to be registered.

Adelaide Lord Mayor Dr Jane Lomax-Smith. Picture: NCA NewsWire / Emma Brasier

Dr Lomax-Smith supported a registration scheme – which interstate included a fee – but said it would need to be implemented by the state government.

“I’ve spoken to several ministers that we would support a registration scheme. It’s entirely within their power, but it’s a decision they have to make,” Dr Lomax-Smith said.

Greens SA MLC Robert Simms previously called on the government to cap the number of nights a property can be listed as short-stay and to offer incentives to encourage properties back on to the long-term market.

“I’d urge the government to rollout something across the state and put the money raised into social and affordable housing to tackle the housing crisis,” he said.

A government spokeswoman said they had promised “no new taxes” but had agreed at national cabinet last year to consider options for better regulation of the short-stay sector.

The spokeswoman would not say if any allocations had been made in the June 6 state budget to ease the housing crisis, only that “housing is a key priority for this government”.

Originally published as Adelaide City Council identifies 602 short-stay properties to pay higher rates, if draft budget is approved