Following on from my brief email last week, I’ve spoken with other RTBs, VTIC, my Board, and several industry experts, regarding the proposed 7.5% levy on short term rental (STR) accommodation. Our position is that we are opposed to the measure as it stands, but rather than jumping up and down saying we don’t like it, we’re responding with some suggested amendments to the policy, and clarification on key points.
I have written a letter to the Premier which articulates our stance, but the key points are:
- The levy is too high at 7.5% and should be between 3-5%. This is in line with what other jurisdictions around the world are doing.
- A greater proportion should be allocated to social housing in regional Victoria. Regions will contribute more than half of the revenue but get a quarter of the social housing funding.
- An allocation should go back to Councils to offset the impacts of short stay accommodation and improve amenity. Particularly because there’s a clause in the proposed policy that precludes Councils from charging their own tax on STRs.
- RTBs/VEPs should be provided with an annual percentage of the levy to offset the decrease in demand and spend which will inevitably be the result of higher prices. The money would be invested into regional marketing and industry development.
- Clarity is needed with respect to the type of properties that are subject to the levy, ensuring that purpose-built accommodation, which doesn’t take housing stock out of the market, must be exempt.
- Regions are more heavily impacted than the city by this proposed levy, because of our low number of commercial accommodations and resulting reliance on STRs to accommodate visitors.
- Consideration should be given to the supply side, such as greater regulation of STRs and simpler processes for commercial accommodation development, not just taxing the demand side to fund the housing strategy.
Obviously, there is more to play out and we will continue to advocate against what is, in our view, effectively a tourism tax. It seems clear that regional Victoria will suffer disproportionately, so we need to push for significant changes.
This was a long time coming, and it was inevitable that there would be Government intervention into the impact of the so-called “Airbnb effect” on housing. We’ve been advocating for a well-informed, considered, and balanced approach to the perceived issues, but do not believe the proposed policy is the right one. Hence our advocacy for change to the proposal and request for greater clarity.
So, “What can I do?” I hear you ask. If you agree with the policy, or are ambivalent, do nothing. If you feel that the policy hasn’t got it right, never underestimate how much power and influence you have as a business owner, constituent, and voter. I suggest you write to your local state member who is most likely Mary-Anne Thomas if you’re in our region; she’s good value I think. If enough tourism and hospitality businesses express their views, and there’s a united and coordinated groundswell of opposition, changes will be made.
Steve Wroe (he/him)
Daylesford Macedon Tourism