City of Melbourne looking to cap rental days for Airbnb owners

Lord Mayor Sally Capp has proposed plans to introduce a $350 registration fee and a 180-day cap on rental days for short-term property owners in the CBD.

Short-term rental owners are the focus of laws proposed by Lord Mayor Sally Capp in an effort to ease the housing crisis. Picture: Nicki Connolly

Melbourne Airbnb owners face a $350 tax hit and could be limited to renting their properties to just 180 days a year under sweeping changes floated by lord mayor Sally Capp to tackle the rampant housing crisis.

The City of Melbourne will vote to start consultations into the short-term industry in the city’s CBD on Tuesday, with the eventual aim to introduce local laws to free up more long-term property opportunities for desperate renters.

“We are in a housing crisis. Every home that becomes available matters,” Ms Capp said. “That’s why we’re looking at ways to encourage property owners to move into the long-term rental market.”

There are currently over 4000 short-term rental listings within the City of Melbourne, and with a 0.8 per cent vacancy rate for rental properties in the CBD, renters are struggling to find gaps in the market.

“The most stressed cohort of our City of Melbourne population is renters. They are desperately looking for properties, in particular key workers and students,” she said.

Ms Capp said the short-term rental market was “ahead of government” in Melbourne, where the industry has solidified itself as one of the biggest in Australia.

Following other capital cities, most notably in Sydney where similar state laws were introduced in 2021, the proposed laws have been met with criticism.

Melbourne’s CBD will follow other capital cities and look to introduce new local laws that would encourage long-term rental opportunities. Picture: Jason Edwards

Australian Resident Accommodation Managers Association chief Trevor Rawnsley said governments had to be careful not to “throw the baby out with the bath water” and inadvertently “wipe out” the tourism industry.

“The visitor economy wants choice, and a large percentage of them want to stay in serviced apartments as long as they are well managed,” he said.

“Not everybody wants to stay in a hotel/motel or caravan park.

“The modern traveller wants choices including space, a ­laundry, cooking facilities … ­serviced apartments provide these ­choices.”

This sentiment was echoed by Melbourne resident Vikki Hanning, who owns and rents out her property in riverside Southbank using Airbnb when she is away from her home for work.

Ms Hanning was shocked to hear of the proposed laws and questioned the authority to “dictate” what she did with her property, saying if they wanted control of her home, they could “buy the property”.

“Not everyone wants to stay in hotels, with the prices they charge,” she said.

When asked how the current system of short-term rental property owners would be policed, Ms Capp said the council would undertake a thorough investigation but would prefer owners to “self-register” their properties.

“We will seek people to register and our experience in other municipalities is that up to a third of people self-nominate.”

“Beyond that, we’ll be using data and evidence through a number of means, for example, through utility and water usage and by looking at the websites.”

Airbnb Australia and New Zealand country manager Susan Wheeldon said they welcomed fair and balanced regulation of the short-term rental industry but suggested statewide frameworks should be introduced rather than “council-by-council approaches”.