Victorian landlords who let their properties via short-term rental platforms such as Airbnb could be charged a new tax under measures to be considered by the Andrews government to ease the rental crisis in tourist areas such as the Mornington Peninsula.
Capping the number of nights landlords can list their properties on Airbnb, imposing a “tourist tax” as has been done overseas, or empowering local councils to charge property owners higher commercial rates should all be on the table, say Labor MPs involved in early discussions on the government’s upcoming housing policy.
Short stay accommodation is booming along the Mornington Peninsula.Credit: iStock
An Airbnb crackdown would be a further hit to landlords after this month’s state budget slugged owners of two or more properties with an increase to land tax in a bid to pay down debt. Premier Daniel Andrews has flagged further housing reforms in coming months and last week would not rule out further measures aimed at landlords.
The Sunday Age spoke to five Labor MPs on the condition of anonymity to discuss internal party matters.
Some MPs are calling for reform given the number of marginal seats that are close to the Mornington Peninsula, where the lack of affordable rentals is a major issue.
The MPs believe they need to do everything possible to lower the pressure on rents – given younger voters now make up such a large voting bloc – to help secure votes for years to come.
They also say clamping down on short-stay accommodation should occur early in this term of government – and not too close to the next election – in case there is backlash from older Victorians who own property and benefit from listing their beach houses on platforms such as Airbnb.
Melbourne’s Sandbelt has witnessed an influx of short-stay rental listings in recent years, often at the expense of the long-term rental market.
In Mornington, the April vacancy was 2.2 per cent. That’s higher than in other parts of Victoria, but still makes it difficult to find a rental.
The Labor MPs will raise the potential housing reforms at future caucus meetings in the hope they will be adopted by cabinet.
“I think now’s the time to be bold,” one Labor MP said.
“We’ve got the political capital that comes from our resounding success last year. It’s not going to be easy. But it’s the right thing.
“There have been conversations among Labor MPs about housing reform. All of these things are on the table. It’ll be up to cabinet to sift through all of this and make decisions.”
Another Labor MP said: “If you look at where our marginals are, there’s a real interest in housing because too much is taken up by short-stay rentals. It’s squeezing the teacher-nurse cohort.”
Any reform would be about changing how Airbnb properties were treated at the state or local government level, the MP said.
“It might not be a state government tax. It might be a local government deeming [that] they’re commercial properties for the purpose of rates, for example.”
There were almost 5000 homes for rent on Airbnb along the Mornington Peninsula in February, up from about 4000 last year, according to data collection website insideairbnb.com. Airbnb properties are booked for just 52 days a year on average, according to the same platform.
It comes as Victorian renters endure an extremely tight and expensive rental market. Vacancy rates reached a record low of 0.8 per cent in Melbourne early this year.
The NSW government introduced short-stay regulations in November 2021, limiting the time a property can be on the market to 180 days a year. The Victorian Greens have previously called on the Andrews government to introduce a 90-day cap.
In Italy and Scotland, legislators have considered tourism levies they say will be used to funnel money back into local communities.
Mornington Peninsula Shire and other Victorian councils have already introduced annual registration fees and moved to clamp down on Airbnb noise complaints.
Mornington Peninsula Mayor Steve Holland said he favoured reforms that would grant councils more autonomy.
“Local government should have the power to regulate and permit short-stay rentals in line with the expectations of the community,” he said. “Councils are the best place to deal with this issue. Some councils have less than 500 Airbnbs. We’ve got an estimated 5500.”
Mornington Peninsula Shire does not charge residential and commercial properties different rates. But other councils that have a large number of Airbnb listings, such as the City of Melbourne, do.
Airbnb Australia and New Zealand’s head of public policy Michael Crosby said the company was not opposed to a statewide tourism levy and this was, in fact, his preferred approach because it created consistency compared with a council-by-council approach.
“We believe tourism levies are a fair and sustainable way to raise revenue for local communities, especially in areas of high tourism, as they broaden the revenue base without imposing an additional burden on local ratepayers or businesses,” he said.
Grattan Institute economist Brendan Coates said it was time for the Andrews government to encourage owners of short-stay rentals to return those properties to the long-term rental market.
“That would come with a cost, because fewer Airbnbs would mean less regional tourism, and therefore fewer regional jobs,” he said. “But it would be better than seeing families across Victoria living in caravan parks, tents and cars.”
Alphington mother of two Kasia D’Agnolo said she wouldn’t be placing her and her husband’s Sorrento Airbnb on the long-term rental market even if additional state government regulations were put in place.
“Our primary reason for having this beach house is to enjoy it as a family,” she said.
“I don’t want to get stung any more. But it’ll all get negatively geared anyway. I think they need to look at where this will make an impact.
“And let’s not forget the benefit Airbnb has on regional areas in terms of regional businesses and the affordability of family holidays.”
Rye retiree Linda Wimetal said something had to be done to reduce the number of “unsustainable, expensive, part-time dormitories” in her area.
“There’s nothing to rent down here except for more than $500 a week. Yet there’s 1600 Airbnbs in Rye alone,” she said. “That is very poor planning. Working families are known to be sleeping in tents on the beach.”
The seat of Nepean, which takes in Mornington Peninsula towns including Rye, flipped from Labor to Liberal at last year’s election. Former tennis player Sam Groth holds Nepean with a 6.7 per cent margin. The nearby Labor seats of Bass and Hastings are held by margins of 0.2 and 1.4 per cent, respectively.
Coates said when it comes to tackling the rental crisis, the main focus should be on boosting residential development in Melbourne’s inner and middle-ring suburbs.
“In the long term, the only way to keep rents in check is to build more housing. Victoria has not built enough housing to meet the needs of its growing population.”
The Property Council has an open mind when it comes to regulating short-stay accommodation, but is expected to oppose any move to cap rent increases. Landlords are already limited to raising rent once a year, but there is no limit to that increase.
Asked about the potential reforms, a Victorian government spokeswoman acknowledged the state did not have enough housing to meet demand.
“We’re working hard on a package of reforms – including rental reforms – that will come later in the year, and we will have more to say in due course,” she said late Saturday.
Speaking to reporters on Thursday, Andrews stressed that additional housing reforms were still a few months away.
“We don’t have enough supply, and we need more of that,” Andrews said. “That will be a significant feature of that housing statement. It’ll take time and there’ll be different stages. But it’ll be a really big down payment on what the next part of housing looks like to try and drive down prices.”
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