Victoria's New Short Stay Levy: What It Means for Short-Term Rental Hosts and Property Owners

Victoria's New Short Stay Levy: What It Means for Short-Term Rental Hosts and Property Owners

In a move to boost affordable housing, Victoria is introducing a 7.5% short stay levy effective January 1, 2025. This levy targets short-term rentals booked for less than 28 days, including holiday homes, apartments, and guest units, regardless of the booking platform or direct arrangement. Here’s a comprehensive look at the levy’s impact, the responsibilities for hosts and property managers, and the specific guidelines surrounding its implementation.

Why a Short Stay Levy?

The new short stay levy has been established to address Victoria's housing affordability issues. Funds collected from this levy will go directly towards affordable housing projects managed by Homes Victoria. With the housing market’s tight supply and rising costs, especially in metropolitan and popular tourist areas, this initiative is set to generate additional resources to benefit the broader Victorian community.

What Properties Are Affected?

The levy applies to a broad range of properties used for short-term stays under 28 days, including:

Entire homes or apartments: Vacation rentals of full properties.

Guest units on residential land: Self-contained units separate from the main dwelling.

Private room/s in a house: where the house is not a person’s primary residence

Hotels, motels, and other types of commercial lodgings are exempt, as are stays within a primary residence. This means if a homeowner rents out a spare room in their primary residence, it won’t fall under the levy requirements. This structure aims to focus the levy on properties exclusively dedicated to short-term rentals, which often contribute to the decrease in long-term rental availability in the state.

Host Responsibilities and Compliance

Property owners and managers need to be aware of their responsibilities under the new levy:

Registration Requirement: Hosts must register properties with the State Revenue Office (SRO) if they fall under the levy’s scope, no later than 30 days after the return period. If collecting less than $75,000 in total booking fees in a calendar year, you will need to lodge and pay annually. If great than the $75,000 threshold, your return periods will be quarterly – 1 January, 1 April, 1 July and 1 September.

Levy Collection and Payment: The 7.5% levy applies to the total accommodation cost for each booking under 28 days. Hosts are responsible for accurately calculating and remitting the levy, whether bookings are managed directly or through platforms like Airbnb or Stayz.

Reporting Requirements: To maintain compliance, hosts will likely need to report rental income related to short stays regularly, documenting stays and levy payments for accuracy and transparency. Failing to comply could lead to penalties, so ensuring proper systems and records are essential.

Key Considerations for Short Stay Hosts

For those operating short-term rentals in Victoria, it’s important to consider the levy’s impact on pricing and booking processes:

Pricing Adjustments: Hosts may consider adjusting nightly rates to incorporate the additional cost of the levy. Transparent communication in listings and booking details can help maintain trust with guests.

Impact on Demand: While the levy’s ultimate effect on demand remains to be seen, understanding the financial commitment involved is crucial for short stay hosts, especially as this initiative is aimed at reducing the number of homes solely used for short-term rentals.

Potential Exemptions and Reductions: The SRO has specified that only properties entirely dedicated to short-term rentals fall under this levy. This could encourage homeowners to explore alternative approaches, such as long-term rentals or renting out a room within their primary residence, which are exempt.

Transitional Arrangements

To assist with the introduction of this levy, transitional rules mean the short stay levy will only apply to bookings made on or after 1 January 2025.

Bookings made before 1 January 2025 but the stay occurs after this date will not be included when calculating the levy.

Preparing for the January 1, 2025 Implementation

With the levy going into effect at the start of the new year, hosts have a few months to get their systems and processes in place. Here are some steps to consider:

Review Property Listings: Clarify pricing and booking terms, updating descriptions to reflect the new levy if it impacts the final cost for guests.

Stay Updated on SRO Guidelines: As January 2025 approaches, the SRO is expected to provide further details to support hosts and answer common questions.

Evaluate Financial Projections: Factoring the levy into financial planning is essential, especially for hosts who rely on short-term rentals as a significant income source.

Final Thoughts

The introduction of Victoria’s short stay levy represents a significant step in addressing the state’s housing issues. As it rolls out, staying informed and compliant will be crucial for property owners to avoid fines and ensure a smooth transition. This levy not only brings a change in the financial landscape for short-term rentals but also highlights Victoria’s commitment to improving housing accessibility.

For more details, including registration steps and levy-specific guidelines, visit the official SRO Victoria page on the short stay levy.

Contact Stacey Shelden or your tax advisor at CoggerGurry for assistance. T: (03) 5571 0111

Source: State Revenue Office website

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Aged Care “Deposits” Explained

By Cogger Gurry • December 17, 2025

Aged Care “Deposits” Explained: RADs, DAPs and What Families Need to Know When a loved one moves into residential aged care, one of the biggest (and most confusing) costs is the accommodation payment — often referred to as an “aged care deposit”. In practice, there are a few different ways to pay, and the best option depends on cash flow, assets, and your broader plans. Step 1: Start with the room price Before entry, you’ll agree on a room price with the aged care home. Providers must publish their prices and you can negotiate (but you generally can’t be charged more than the published price for that room). If a provider wants to charge above a government-set threshold, they may need approval from the Independent Health and Aged Care Pricing Authority. Step 2: Your means assessment affects what you pay Services Australia assesses income and assets to determine whether you’ll pay the full accommodation cost yourself or receive some government support. Those with support may pay an accommodation contribution instead of the full price. The three common payment methods Most residents will be offered one (or a mix) of the following options: 1) Refundable Accommodation Deposit (RAD) A RAD is a lump sum paid upfront (think of it like a large bond). It is refundable when the resident leaves care, less any agreed deductions (for example, unpaid fees). The RAD is also treated as an asset in the means assessment. 2) Daily Accommodation Payment (DAP) A DAP is a non-refundable daily amount, like paying “rent” instead of a lump sum. It’s calculated using the government-set Maximum Permissible Interest Rate (MPIR), applied to the unpaid portion of the room price. In simple terms: DAP = (Unpaid RAD × MPIR) ÷ 365 3) A combination of RAD + DAP Many families choose to pay part of the RAD upfront (to reduce the daily cost) and pay a smaller DAP on the balance. This can help manage cash flow while keeping some funds available. An additional option is to use the part payment of the RAD to fund the payment of the DAP. This helps with cashflow but does have the effect of increasing the amount of the DAP as the RAD diminishes over time. A note on recent reforms Rules can differ depending on when someone enters care. Recent reforms introduced RAD retention for eligible residents (a small non-refundable amount deducted over time, capped) and changes affecting how accommodation costs are managed under newer arrangements. If you’re arranging entry now, it’s worth checking which “entry date” rules apply before signing. How we can help Aged care decisions are often made quickly, under stress. Before you commit to a RAD, DAP, or a mix of both, it’s wise to consider how the choice affects: ongoing cash flow and affordability sale/retention of the family home Centrelink outcomes and estate planning General information only: This article is not personal financial advice. We recommend seeking advice tailored to your circumstances before making decisions. Before you choose a RAD, DAP or a combination, get advice tailored to your circumstances. Call us to book an aged care funding review, so you can feel confident about the decision and avoid surprises.

Start Your Year-End Payroll, Tax And Employee Leave Planning Now

By Cogger Gurry • November 13, 2025

Start Your Year-End Payroll, Tax And Employee Leave Planning Now The end-of-year holiday period can be make or break for your business. Whether you’re gearing up for a rush or planning a shutdown, the key is early planning for payroll, tax and super, alongside careful compliance with workplace laws. Start by checking whether any year-end paydays will fall on public holidays or during your closure. If so, you’ll need to bring the pay run forward so staff are paid before bank cut offs, and tell employees about any temporary date changes in writing. While the ATO generally allows lodgement and payment on the next business day when a due date falls on a weekend or public holiday, that doesn’t extend to paying wages late. Report each pay run through Single Touch Payroll (STP) on or before payday, including any brought forward payments you’re processing before year-end closure. Keep your PAYG withholding and BAS lodgements on track. If you’ll have difficulty meeting due dates, contact your tax adviser and the ATO early to discuss options. Don’t overlook super guarantee (SG) contributions on wages and paid leave taken over the break; annual leave and public holiday pay are part of ordinary time earnings for SG purposes. October to December quarter super must be received by employees’ funds by 28 January, so pay early to allow for bank processing times and so you don’t trigger the SG charge, interest, penalties and loss of deductibility. If you provide year-end bonuses or staff gifts, process bonuses through payroll and withhold tax, and consider whether FBT applies to functions or presents. The minor benefits exemption may cover low cost, infrequent items, but good records are essential. Remember that full-time and part-time employees who would normally work on a public holiday are entitled to their base rate for ordinary hours if they don’t work. You can ask employees to work public holidays, but requests must be reasonable and employees can refuse on reasonable grounds. If they do work, apply the correct penalty rates or time off in lieu under their award or agreement. Where a public holiday happens during an employee’s annual leave, it counts as a public holiday, not a leave day. For holiday shutdowns, you can only direct employees to take annual leave if an applicable award or registered agreement allows it, usually with advance written notice. Where staff don’t have enough leave, many awards allow leave in advance or unpaid leave by agreement; make sure to document any agreement in writing. Check whether leave loading applies to annual leave taken over this period, and ensure your payroll system calculates it correctly.

PayDay Super

By Cogger Gurry • November 13, 2025

PAYDAY SUPER - Next step for payday super: legislation introduced to Parliament The government’s payday super reforms have taken another step towards implementation with the introduction of legislation to Parliament. Requiring employers to pay employee super contributions on payday, the reforms are designed to ensure that employees benefit from more frequent and earlier super contributions that grow and compound over their working life and reduce instances of unpaid super. Contribution timeframes are now measured in “business days” rather than “calendar days”, and employers will have 7 business days to make contributions. The legislation still needs to pass through both the House of Representatives and the Senate before it becomes law, but you shouldn’t wait to start planning. Recognising that employers need time to deploy, test and embed changes in their payroll systems and business processes, the ATO has released a new draft Practical Compliance Guideline that outlines its proposed compliance approach for the first year of payday super (starting 1 July 2026). It plans to use a risk-based framework where employers will be categorised as at low risk, medium risk or high risk of not meeting their payday super obligations. What’s next? Start preparing now. Review your payroll systems and processes to ensure they’re ready for payday super by 1 July 2026; consider whether more frequent super payments could have cash flow implications for your business that you need to act on; and look for alternatives if you use the SBSCH, as it will be closed from 1 July 2026. Planning ahead will help you be compliant with the law and make a smooth transition. Keep an eye on developments as the legislation progresses through Parliament and as the ATO finalises its compliance guideline. Changes could still be made before the reforms take effect.