At first glance, renting out your property for short stays feels like a win-win. You make some extra cash, travellers get a place to stay, and everyone walks away happy. Since 1 January 2025, a new rule has been in effect, and it is changing how much you actually keep from those bookings.
It is called the short stay levy, and while it might seem minor, it has the potential to eat into your earnings if you don’t understand how it works.
But not everyone realises they are responsible for it. And that small misunderstanding could cost you.
Before it does, here’s everything you need to know.
What is the short stay levy?
Put simply, the short stay levy is a 7.5% charge applied to short stays, defined as any booking under 28 consecutive days. It is calculated on the total booking fee, which includes cleaning fees and GST (if applicable) but excludes credit card charges.
This levy is part of the Victorian Government’s efforts to support the development of more social and affordable housing, with a portion of funds specifically allocated to regional areas.
Sounds straightforward so far, right? Here’s where it gets interesting.
Does this apply to you?
No one wants to pay more than they have to. So, it’s worth knowing exactly when the levy does and does not apply.
If the property you are renting out is your principal place of residence (your main home), and you only let it out occasionally while you are away, good news: The levy doesn’t apply.
But if you’re renting out:
- A second home or investment property
- A private room in a property that isn’t your main residence
- A granny flat or separate dwelling on your property
- A tiny home, even if it’s on your own land
Then, yes, the levy applies to you.
And if you are still unsure, ask yourself: Do I live in this property most of the time? If the answer is no, it’s likely the levy will apply.
What about booking platforms?
If all your bookings go through an online booking platform, the platform itself is responsible for registering, collecting, and paying the levy.
However, if you take direct bookings (through your own website, by phone, or even by email), you are responsible for registration, lodging returns, and paying the levy yourself.
And if you use a mix of direct and platform-based bookings, you may still have to register and lodge returns for the portion you handle yourself. It’s not an either/or situation.
When do you need to pay?
It depends on how much you are earning from your short stays:
- $75,000 or more per year in booking fees? You will need to lodge and pay quarterly.
- Less than $75,000 per year? You will lodge and pay annually, with the first period ending 31 December 2025.
Your first deadline, if you fall into the higher income category, is 30 April 2025. Miss it, and you could be facing penalties.
What if the booking was made before 1 January 2025?
If the booking was confirmed before 1 January 2025, no levy applies—even if the stay was completed after that date.
But for any bookings made and completed on or after 1 January 2025, the levy fully applies. So, timing matters.
Are any properties excluded?
Yes. The levy does not apply to stays in:
- Your principal place of residence, when let occasionally
- Hotels, motels, hostels, or similar traditional accommodation providers
- Student accommodation tied to educational institutions
- Temporary crisis accommodation provided by not-for-profits
- Employee or contractor housing provided by organisations like schools, farms, or healthcare facilities
- Rooming houses, retirement villages, or supported residential services
If you are managing one of these, you can breathe easy, for now.
Why does this matter?
At first glance, 7.5% might not seem like much. But over multiple bookings, it adds up quickly. A $500 booking? That’s nearly $38 in levy charges. Multiply that across several stays, and you’re suddenly looking at hundreds—if not thousands—of dollars per year.
More importantly, the consequences of non-compliance aren’t just financial. Failing to register or pay on time could result in penalties, interest, and an administrative headache you definitely didn’t sign up for.
So the real question is: Can you afford to overlook this?
What should you do now?
If you offer short stays in Victoria, and this applies to you:
- Check your property type—is it your primary residence or not?
- Determine how you accept bookings—direct, platform, or both.
- Estimate your yearly income from bookings
- Register before your first return is due
- Keep records and stay organised
You’ll be able to register, lodge returns, and pay the levy via the Victorian Government website. More detailed guidance and templates will be available ahead of the first reporting deadline.
Final thought
Short-term letting can be a great source of income. But it also comes with responsibilities, especially now. The short stay levy isn’t something to ignore or “worry about later.” If you’re not prepared, it could take a significant bite out of your earnings.
So take a moment to ask yourself: Are my short stays about to cost me more than I realised?
If you’ve read this far, you’re already ahead of the game. Now, it’s just a matter of taking the right steps.
Because a little attention now could save you a lot of money (and stress) down the track.
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