New government levy on Airbnb owners won't make any difference, tourism industry says

Canberra’s tourism industry says a proposed new levy on short-term accommodation options on sites like Airbnb and Stayz designed, in part, to increase the number of rentals on the market, will have next to no effect.

The levy, if passed through the Legislative Assembly, will require providers to pay 5 per cent of the total booking cost for short-term stays from 1 July 2025.

The government says it mirrors similar levies in other jurisdictions like Victoria where, since 1 January 2025, short-term accommodation providers pay a 7.5 per cent levy on the total booking cost.

The Tasmania Liberals have also promised to introduce a 5 per cent levy on short-stay accommodation, with 100 per cent of what it estimates will amount to $11 million a year going “directly to assisting first-home buyers”.

ACT Treasurer Chris Steel expects the levy to have a “modest impact on long-term rentals being available to local renters, rather than short-term visitors”.

“Short-stay platforms will remain an important part of the visitor economy, but this strikes a fairer balance between the costs of operating hotel, motel and other accommodation, which is subject to reasonable regulation and often payroll and other taxes.”

Budget papers for the 2024/25 financial year expect the levy to raise $3.8 million in its first year, $3.9 million in 2026/27 and $4.1 million in 2027/28.

“The revenue generated goes to delivering Canberra’s great local tourism and events as well as other critical government services,” Mr Steel added.

The levy won’t apply to hosted accommodation, such as where the occupant of the property lists a single room and resides in the property with the guest or accommodation booked directly with the property owner.

Hotels, motels, serviced apartments, caravan parks, camping grounds and hostels are also excluded from the levy.

Over the border, the NSW Government is conducting an inquiry into the effect of short-term rental accommodation on housing supply and affordability in the state.

In a submission, Expedia, which owns booking platforms Stayz and Wotif, expressed support for a levy set at a “sensible” rate but maintained that it must be applied to all accommodation, including hotels.

It didn’t quantify what would constitute a sensible rate, but it has previously strongly objected to Victoria’s 7.5 per cent levy.

Airbnb also expressed support for a levy in NSW, providing it’s set at between 3 and 5 per cent of the total cost of accommodation.

It said the NSW Government should also scrap caps on the number of nights properties can be rented. Properties in Byron Bay, for instance, can only be rented for a maximum of 60 nights a year, and in greater Sydney, the maximum is 180 nights a year.

The ACT legislation doesn’t mention any cap, but the ACT Greens have already said it doesn’t go far enough.

“Today’s legislation from Labor to regulate short-term rentals falls far short of addressing the housing crisis facing Canberrans,” Greens leader Shane Rattenbury said.

“The government’s step today is insufficient. This small levy will fail to increase the number of affordable homes available to long-term renters, and it will fail to raise enough revenue to make a meaningful impact on the budget bottom line.”

The Greens suggest short-term rentals should be limited “to the home you live in”.

Canberra Region Tourism Leaders Forum chair David Marshall agrees the effect on the rental market will be “minimal” and that a 5 per cent increase to the cost of short-stay accommodation bookings is “not going to stop people using them at all”.

He says Canberra doesn’t have the problem of other places like Noosa in Queensland, where there are estimated to be about 4000 short-stay accommodation options in a place with a population of just 58,000.

“The commentary has been that it’s just another tax on the accommodation sector, really, and you could describe it as that because if it’s trying to free up homes to relieve the rental market, I don’t know it’s going to achieve that.”

But Mr Marshall argues it’s still a worthy levy provided the money is allocated to increasing the marketing budget for the government’s tourism agency, Visit Canberra.

“If they’re going to raise this money from tourist accommodation, then it should go back into Visit Canberra. I think that’s a very, very strong argument we’ll be putting forward.”

ACT Branch of the Australian Hotels Association general manager Chris Gatfield agrees and says the rental market would only benefit if the levy were accompanied by caps on the number of nights properties are available each year.

“Caps on nights is the one policy initiative that encourages owners and property investors to return properties to the long-term rental market,” he says.

But he says it might be enough to push some customers from their “little one-bedroom Braddon apartment” to instead stay “at the Brassey”. It also levels the playing field.

“Realistically, if a property investor is purchasing a one-bedroom unit in Braddon, the rental return is far higher for them to put it on the short-term rental market than it is on the long term – that’s a commercial decision for them – but our view is they should be paying commercial rates if they’re using a residential property for commercial [purposes].”