What is the Victoria Short Stay Levy?

Join the Lodgify newsletter

Once a month, get free templates, expert tips for hosts, industry news, webinar invitations, and more.

Subscribe

I agree to receive commercial communications from Lodgify.

How it works

The levy is calculated at a rate of 7.5% of the revenue from each short-term rental booking. For transactions processed through online travel agencies (OTAs), the platform is responsible for collecting the levy from the guest and remitting it to the State Revenue Office.

For bookings made directly with an owner, such as through a personal website built with a tool like the Lodgify website builder, the owner or manager is responsible for collecting and remitting the levy themselves. This system aims to create a consistent contribution from the short-stay market towards housing solutions.

Why it matters

This levy directly impacts the operating costs and pricing strategies for short-term rental hosts in Victoria. Owners must account for the levy when setting their nightly rates to maintain profitability, which may affect their competitiveness.

For property managers and hosts, it introduces an administrative responsibility for compliance, requiring accurate tracking and remittance, particularly for direct bookings. Understanding this regulation is crucial for legal operation and financial planning within the Victorian short-stay market.

See the official website for current details.

Examples

• A host in Melbourne lists their apartment on a major OTA. When a guest books a three-night stay, a 7.5% levy is automatically added to the guest's total payment, which the platform collects and remits to the government on the host's behalf.
• A property manager with several holiday homes along the Great Ocean Road takes a direct booking. They must manually calculate the 7.5% levy on the booking revenue and set aside the funds for their remittance to the State Revenue Office.
• An owner renting out a room in their primary residence in Ballarat for weekends is also subject to the levy, as it applies to all commercial short-stay accommodation, not just entire homes.
• An investor analyzing the profitability of a potential short-term rental property in Geelong must factor the 7.5% Short Stay Levy into their revenue projections and expense calculations to determine an accurate return on investment.