Nick Walker from DBA Lawyers said that under the Short Stay Levy Act 2024, a 7.5 per cent levy on total booking fees will apply for short-stay rentals from 1 January 2025.
“So, for example, if an SMSF is renting a property directly and not through a booking platform they need to register with the State Revenue Office and determine when they need to pay the levy,” Walker said.
“The levy will still be imposed on a booking platform in relation to short-stay accommodation anywhere in Victoria even if the owner/tenant is located outside Victoria.”
Walker said under the STL Act, the total booking fee will be calculated as the sum of all fees related to the booking including cleaning fees and GST, but not credit card fees/surcharges.
“Where a booking is done through a platform, the booking platform will be required to pay the levy but if the booking is done directly through the owner/tenant, then they will be required to pay it.”
He continued that two elements must be satisfied for the levy to apply. In particular, the stay must be a “short stay”, meaning the premises can be occupied for a continuous period of less than 28 days.
Additionally, the “short stay” accommodation must include an entire house/apartment, a private room or a granny flat.
“It does not matter whether the premises are permanent or temporary, or fixed to land or mobile such as a granny flat, caravan or portable home unit,” Walker said.
“Furthermore, it does not matter whether the premises are used for more than one purpose, including a purpose other than the provision of short-stay accommodation.”
He added that the STL Act provides an example of what it considers short-stay accommodation:
“Person A is the owner of a two-storey mixed-use property that is an investment property. The ground-floor premises is leased out to a business for use as commercial premises, whilst the first-floor premises is used solely for short-stay accommodation. The short stay levy will be imposed on every short stay that is completed at the first-floor premises.”
Walker continued that the levy will not apply when an individual rents out their principal place of residence.
“For example, if the owner rents out some rooms in their PPR for short stays or goes on a holiday and rents out their whole PPR for a short stay, the levy will not be imposed,” he said.
“Furthermore, an individual does not need to own their PPR for it to be exempt from the levy. Naturally, if an individual is renting the whole or part of their property, then they should confirm whether their lease agreement allows sub-letting.”
Another example in the act clarifies where the levy will apply to separate premises:
“Person A is the owner of a two-storey property, that has two separate premises. The property is under one title; however, each premises has its own entrance, living quarters and kitchen and bathroom facilities. Person A occupies the first-floor premises as their principal place of residence whilst the ground-floor premises is used for short-stay accommodation. Each time a short stay is completed at the ground-floor premises, it will be subject to the short stay levy. However, each time a short stay is completed at the first-floor premises it will not be subject to the short stay levy as it is Person A’s principal place of residence.”
Accommodations not considered short-stay include commercial residential premises, residential care facilities, retirement villages, student accommodation provided by a higher education provider and temporary crisis accommodation.
Walker said if a short-stay booking is made before 1 January 2025 but taken after that date, the levy would not apply.
As part of the act, Walker said it is now a requirement that all booking platforms, owners and renters that accept short-stay accommodation register with the SRO within the same calendar year that they accept the short-stay rentals.
From 1 January 2025, if the booking platforms, owners or renters are earning $75,000 or more per annum, they must lodge and pay the levy quarterly. If they earn less than $75,000 per annum, they must lodge and pay the levy annually.
“If booking platforms, owners or renters have previously registered with the SRO but no longer expect to incur the levy, they must notify the SRO to cancel their registration,” Walker added.
“If an owner or renter intends to use a booking platform to rent a property/private room on a short-stay basis, then they are required to notify the booking provider if the levy will not apply. Failure to lodge a return and pay the levy by the due date will result in penalties.”
