Short-stay accommodation provided by companies such as Airbnb in Victoria could be subject to a levy as high as 7.5%, under an Australian-first proposal being put to state cabinet next week.
Guardian Australia has confirmed a consumer-facing levy on short-term stays will form a key part of the Victorian government’s housing statement, which will be released as early as next week.
The prospect of a 7.5% levy was first reported by the Age.
According to the website Inside Airbnb, which provides data about the short-term rental platform’s impact on residential communities, there are 23,185 Airbnbs in greater Melbourne, 7,050 in the Barwon South West region and 4,721 in the Mornington Peninsula.
A 7.5% levy would add about $17 per night to the average price of a short-stay rental in metropolitan Melbourne (currently $231), $29 to a stay in Barwon South West (currently $381) and $42 on the Mornington Peninsula (currently $557), according to Inside Airbnb figures.
Such a levy could raise at least $42m annually for the state government, although Inside Airbnb does not include all of Victoria, and the accuracy of the data it collects has been disputed by Airbnb.
Airbnb Australia New Zealand’s head of public policy, Michael Crosby, said while the company was supportive of a levy to fund community infrastructure and services, 7.5% was “too high” and would “give hotels a free kick and create an uneven playing field”.
“A rate that high could have a negative impact on the appeal of the state as a tourism destination, also penalising everyday Victorians at the wrong time,” he said.
“We believe a levy somewhere between 3 [and] 5%, which is in line with international policies, would be appropriate.”
A cabinet minister, who requested anonymity as they are not authorised to speak publicly on the issue, said the state’s expenditure review committee is expected to review housing policies before cabinet meets on Monday.
The premier, Daniel Andrews, is then expected to announce a suite of measures to boost housing supply on Tuesday, which will include changes to planning laws to fast-track approvals and limit the powers of councils to object to major developments.
Another minister said the Airbnb levy may be as high as 7.5%, due to the exclusion of other parts of the tourism industry, including hotels.
Short-stay accommodation provider Stayz said a high levy targeted at the sector alone was “ill-conceived” and puts at risk up to $1.5bn in economic benefit to the state and 9,500 jobs.
“Imposing a consumer-facing levy on short-term stays that could be as high as 7.5% does not represent the best or most equitable way to address concerns around the impact of short-term accommodation,” said Stayz’s director of government and corporate affairs, Eacham Curry.
“Nor should the short-term accommodation sector be painted as the cause of or solution to the housing crisis Victoria is facing.”
But the Victorian Greens leader, Samantha Ratnam, said any levy needed to be accompanied by a 90-day cap on short stay listings.
“Strong short-stay regulations in Victoria would force owners to make homes available as long-term rentals or for owner occupiers, which is actually what is needed right now to increase rental supply, rather than simply increasing the price of holidays,” she said.
Ratnam said many places around the world had already introduced caps, including for 180 days in Sydney and parts of NSW and 90 days in cities such as London and San Francisco.
The opposition’s spokesperson for tourism, Sam Groth, described a levy on short stays as a “tourism and holiday tax”.
“Victorians who work hard to afford a weekend away shouldn’t be the ones to pay for the Andrews government’s record debt or to fulfil a global company’s social responsibility,” he said.
“Adding yet another tax to Victoria’s nation-leading property taxes will only drive critical investment interstate and do nothing to address the fundamental causes of Victoria’s housing affordability crisis.”
A government spokesperson said: “We know there’s no more important an issue than housing – that’s why we’re working hard on a housing package and will have more to say soon”.
