Allan government’s controversial Airbnb tax passes parliament

The cost of holidaying in Victoria is set to increase after the Allan government’s controversial “Airbnb” tax passed parliament, with the 7.5 per cent hike on short stay bookings beginning in January.

The cost of holidaying in Victoria is set to increase after the Allan government’s controversial “Airbnb” tax passed parliament.

New laws that will impose a 7.5 per cent tax on short stay bookings from January 1 passed the upper house on Thursday, with Labor, the Greens, Legalise Cannabis and Animal Justice MPs voting against exemptions for people with disabilities or fleeing domestic violence.

Government modelling has forecast the new tax could generate $60m to be used to fund social and affordable housing.

But Attorney-General Jaclyn Symes on Thursday confirmed just 25 per cent of that would be directed to regional areas, which tourism experts say will be adversely impacted by the new laws.

It is expected the tax could apply to up to 50,000 Victorian properties, with the government hopeful it will encourage investors to return properties to the long-term rental market.

New laws will impose a 7.5 per cent tax on short stay bookings from January 1.

However Ms Symes refused to make public any modelling which forecast how many properties may actually be converted from short-stay accommodation.

She said there was still uncertainty around how the market may react to the new tax.

The Opposition this week committed to repealing the tax as a top priority if it won government in 2026.

Shadow treasurer, Brad Rowswell, said the tax was the 55th new or increased tax imposed by Labor since it came to office in 2014.

“The state of Victoria’s finances has become so dire that the Allan Labor government won’t exempt some of Victoria’s most vulnerable people from paying this terrible tax,” he said.

“Labor hasn’t listened to industry and the community on the impacts of this legislation and continues its addiction to taxes, introducing or increasing 55 taxes and charges since coming to office.

“Labor cannot manage money, and Victorians are paying the price.”

Accommodation providers have raised concerns about their ability to comply with the new tax, which will require self-reporting to the State Revenue Office.

Local tourism operators have also warned the tax will impact both visitation and consumer spending in the regions.

Victorian Tourism Industry Council chief, Felicia Mariani, has previously questioned the need for the tax, saying there were more effective ways to encourage investors to transfer short-stay accommodation to the long term rental market.

In Western Australia owners of short-term rental properties can qualify for a $10,000 incentive payment to transfer their property to the long-term rental market for at least 12 months.

Already about 200 people have registered interest in that scheme.

Originally published as Allan government’s controversial Airbnb tax passes parliament