While the new levy on Victorian short rentals may make them more expensive for holidaymakers, investors could still use it to their advantage.
The Victorian government's new 7.5% short-stay levy came into effect on 1 January. It will apply to all short-stay properties in Victoria where anyone is staying for less than 28 consecutive days.
Bnb Butler founder and CEO, Charlotte Brett, said this could be the perfect opportunity for savvy investors to maximise their property by putting it on the short-term stay market as people move away from the market fearing their profits will decrease.
“Some people are scared, so it may result in properties moving to a tenancy, and therefore reducing rents across the board, because there's a greater supply of long-term rentals on the market,” Brett told Azzet.
“There's a great opportunity for the short-term rental market if properties did move for people to maximise their return.
“With the reduction of interest rates, there will be more disposable income, and there will be less supply of short-term rental properties on the market.”
Brett said the Liberal government has vowed to scrap the levy if they get re-elected in this year’s election, which would create a barrier to the short-term rental market.
“If the levy is scrapped entry to get back into the short-term rental market is quite high, because they have to kick their tenant out, which is not so easy to do with the current legislation and then they also have to then furnish the property and then relist it again from scratch,” she said.
According to Brett, owners can also use the new levy to their advantage by factoring in the levy into their price and offering discounts for stays over 28 days.
“They may want to factor in a 7.5% discount for the longer stays because they won’t be paying the levy so they can make their property look more attractive and gain more booking,” she said.
As of August 2024, Melbourne places as the 13th largest AirBnB market in the world, outranking any other Australian market.
“Melbourne ranks so high because of all the major sporting events we host, like the Grand Prix, and also because it’s a major city with a large food and culture scene,” Brett said.