If you’re a landlord, host, or small business offering short-term accommodation, a recent change in Victoria tax legislation could impact your tax obligations and cash flow.
In an effort to free up housing stock for longer term renters, effective 1 January 2025, the Victorian Government has introduced a 7.5% short stay levy on short-term accommodation bookings of fewer than 28 days. As experts in property and tax accounting, the team at LDB is here to help you plan effectively and stay compliant.
Does the short stay levy apply to your property?
This new tax compliance measure affects short-term stays in:
- Entire homes or apartments
- Private rooms not part of your primary residence
- Secondary dwellings like granny flats or tiny homes
Exemptions apply
You will not be liable for this tax under some circumstances:
- The property is your principal place of residence and only occasionally let (e.g., during peak holiday periods)
- If only a room is let for a short stay, while the property remains your principal place of residence
- If the booking is made through hotels, motels, hostels, and certain institutional accommodations (e.g., student housing, aged care)
Actions:
Review your listings to confirm which properties are impacted. If you believe you’re exempt, you must submit a declaration to the State Revenue Office (SRO). |
Are you taking direct bookings? You’ll need to register with the SRO
If guests book directly with you and not through a third-party platform (like Airbnb or Stayz), then you are responsible for:
- Registering with the SRO
- Collecting and lodging the 7.5% short stay levy
- Remitting payments on time
Actions:
Ensure you complete your SRO registration prior to your first reporting period, then implement processes to accurately track revenue and apply the levy on eligible bookings. |
Know your lodgement deadlines
If your short stay income exceeds $75,000 per year, you’ll need to lodge and pay quarterly. Under $75,000? You can report annually, by 31 January of the following year.
Actions:
Estimate your projected short stay income and diarise your tax return deadlines. If you’re unsure of your lodgment obligations or income threshold, consult an experienced tax accountant near you. |
What about platform bookings?
If your bookings are managed through a registered platform, the platform must handle the levy—but it’s your responsibility to double-check that it’s being done correctly.
Actions:
Read the documentation to confirm your booking platform is registered and compliant, and that levies are being calculated and reported accurately. |
Need help managing your property tax and compliance?
At LDB Group, we understand that changes like these add complexity to your financial landscape. Whether you’re concerned about tax compliance, how this fits into your income tax strategy, navigating your tax reporting in 2025, or staying on top of changing regulations, our team is ready to support you with tax advice, tax planning, business services, and even wealth management strategies.
The new Victorian Short Stay Levy represents a significant regulatory shift for accommodation providers who previously only needed to contend with the state land tax regime and ATO requirements, and expert advice could be crucial to avoid unexpected levy charges or non-compliance penalties in the future.
LDB Group, with our unique service offering covering both taxation and property management expertise, can be a valuable resource for landlords and providers navigating these changes.
If you require any assistance, simply call us on 03 9875 2900 or submit your enquiry through the contact form on this page.
