If you take a booking for a short stay in a Victorian property that is shorter than 28 consecutive days, you may need to pay the short stay levy.
About the short stay levy
- What is a short stay?
- What about stays of 28 days or more?
- How much is the levy?
- Who pays the levy – me or the booking platform?
- When do I have to pay the levy?
- Is the $75,000 quarterly/annual lodgement threshold per entity or property?
- When do I have to register to pay the levy?
- Do I have to pay the levy on a booking that is cancelled?
- When does the short stay levy apply?
Calculating the levy
- How do I calculate the levy?
- Does the levy apply on top of GST?
- Is the levy imposed on late checkout fees?
- Is the levy imposed when there is no fee for the booking?
- Is the levy imposed on a gifted short stay?
- Is the purchase of vouchers subject to the levy?
- Where a renter is charged a fee for damage caused, is this subject to the levy?
- Are add-ons included in the total booking fee?
- How is the levy calculated with package/bundle deals?
Properties
- What properties are not included in the levy?
- How do I know if my accommodation is similar to a hotel, motel or hostel?
- What happens if my tenant leases my property as short-stay accommodation?
- What if I use a booking platform but I believe my property is not liable for the levy?
- Does the levy apply to tiny homes and granny flats?
- Does the levy apply to caravans?
- What is my principal place of residence?
- Can the levy apply to secondary premises on land?
- Does the levy apply to premises which cannot be occupied separately?
- What if my property is not suitable for long-term accommodation?
- My property is used predominantly for non-residential purposes, does the levy apply to any short stay at the property?
- What should I do if I believe my property is exempt?
- Where can I find the excluded property declaration?
Booking platforms
- What is a booking platform?
- If I use a booking platform such as Airbnb, do I need to do anything?
- What about a service that directs guests to another platform?
Transitional arrangements
- What if a guest made a booking in 2024 for a stay in 2025?
- What if I don’t know whether my booking fees will exceed $75,000?
Education
About the short stay levy
What is a short stay?
Any stay for a continuous period of less than 28 days.
What about stays of 28 days or more?
If a stay is for a continuous period of 28 days or more, it is not considered a short stay and you don’t have to pay the levy.
How much is the levy?
The levy is 7.5% of the total booking amount. This includes charges such as cleaning fees, GST (where applicable) and booking fees (excluding credit card surcharges and other third-party fees) each time the property is booked for a short stay. This does not include any amount that is waived or provided as a credit or refund in the event of a cancellation.
Who pays the levy – me or the booking platform?
If bookings are made through a booking platform, the booking platform pays the levy.
If bookings are made directly without a booking platform, then you pay the levy.
When do I have to pay the levy?
If your total annual booking fees are $75,000 or less, you are required to complete one annual return.
If your total annual booking fees are more than $75,000, you need to lodge quarterly returns. The quarterly periods begin on 1 January, 1 April, 1 July and 1 October.
You must lodge a return and pay the levy within 30 days of the end of the relevant return period. Failure to lodge a return and pay by the due date will result in a tax default.
Is the $75,000 quarterly/annual lodgement threshold per entity or property?
Where a person's annual booking fees are $75,000 or more, they are required to lodge quarterly returns. The $75,000 is calculated based on all short stays completed in a calendar year having regard to the following:
- for booking platforms, all short stays made through the platform
- for owners, all short stays arranged through direct bookings (i.e. without the use of a booking platform) in short stay accommodation owned by the owner
- for renters, all short stays arranged through direct bookings with the renter.
When do I have to register to pay the levy?
You must register before the end of the first period in which you are liable for the levy. You can register for the levy and lodge and pay returns via the portal on our website, which will be available soon.
Do I have to pay the levy on a booking that is cancelled?
No. Bookings which are cancelled and where the total booking amount is waived, credited or refunded are not liable for the levy.
When does the short stay levy apply?
The levy applies only to bookings made on or after 1 January 2025.
Calculating the levy
How do I calculate the levy?
The short stay levy is 7.5% of the total booking fee (i.e. the total amount paid for the stay).
The total booking fee includes charges such as cleaning fees and GST payable for any component of the booking. It does not include amounts charged for using a particular payment method, such as credit card surcharge fees.
Where one all-inclusive fee is charged to a guest, the short stay levy is calculated on that fee.
Where the fee charged to the guest is itemised (such as a separate cleaning fee, booking fee, GST for any component of the booking fee, and the short stay levy), the short stay levy is calculated on the sum of the itemised amounts.
Where the short stay levy amount is not a multiple of 5 cents, it must be rounded down to the nearest multiple of 5 cents.
Example 1
Enrique uses a booking platform to book a 2-night stay at a home in Torquay. The platform itemises the fee:
| Item | Fee |
|---|---|
| Accommodation – $500 per night | $1,000 |
| Cleaning fee | $100 |
| Guest service fee | $150 |
| GST (on cleaning fees) | $10 |
| Short stay levy (7.5% of $1,260) | $94.50 |
| Total | $1,354.50 |
In this example, the total booking fee Enrique pays is $1,354.50. As the total booking fee is itemised, the short stay levy is based on the sum of these itemised amounts.
Once the short stay is completed, the booking platform is liable for the levy. The levy is calculated as 7.5% of $1,354.50, being $101.55 (rounded down from $101.59). The booking platform must include this amount in its return to the State Revenue Office.
Example 2
Sandy books a 3-night stay at a cottage in Ballarat directly with the owner after seeing an advertisement on social media.
The total booking fee is $950, plus a credit card surcharge of $9.50. The total amount Sandy pays is $959.50. The owner has not separately itemised the short stay levy in the amount charged to Sandy.
Once the short stay is completed, the owner is liable for the short stay levy. The levy is calculated as 7.5% of $950 (as the credit card surcharge is excluded), being $71.25. The owner must include this amount as part of their return to the State Revenue Office.
Example 3
Rohit uses a travel agency to book a 2-night stay at a tiny home in Warburton. The agency charges:
| Item | Fee |
|---|---|
| Accommodation – $300 per night | $600 |
| Cleaning fee | $55 |
| Guest service fee | $75 |
| Payment processing fee | $50 |
| Total | $780 |
The total amount Rohit pays is $780. When making payment, Rohit uses a $500 credit he received from a previous cancellation, and pays the rest with cash. As the payment processing fee is imposed by the travel agency, rather than a charge for using a particular payment method, it is included in the total booking fee of $780. There are no additional payment method fees for this booking.
Once the short stay is completed, the agency is liable for the short stay levy. The levy is calculated as 7.5% of $780, being $58.50. This amount must be included in the travel agency’s return to the State Revenue Office.
When a booking is cancelled, the levy does not apply to amounts provided as a credit or amounts which have been waived or refunded. But when a guest uses a credit to pay for a short stay – like Rohit’s $500 credit in this example – the credit is treated the same as a cash or credit card payment.
Does the levy apply on top of GST?
Yes. As the total booking fee specifically includes “any amount included in respect of GST” paid for a short stay, the short stay levy is payable on any GST amounts included in the total booking fee.
Is the levy imposed on late checkout fees?
The levy is calculated on the total amount payable for a short stay. This is known as the total booking fee and includes any fees charged for a late checkout.
Accordingly, when completing a return, any amount paid towards a late checkout fee should be included in the amount declared as the total booking fee for the stay.
Is the levy imposed when there is no fee for the booking?
The short stay levy is imposed on the total booking fee payable for a short stay. If nothing is paid for the stay (i.e. an owner of a holiday home permits a friend to stay without charge), then the stay is not subject to the levy.
However, if the guest is required to make a payment in connection with the stay, even if this is just a reimbursement for costs such as cleaning fees or utility costs, these payments are considered a booking fee, and the levy is payable on the total amount for the stay.
Example
David lets his cousin stay at his beachfront holiday home for 2 weeks over the summer. David does not charge his cousin for use of the accommodation. However, David has a cleaner who he regularly engages to clean the home after stays at the home. The cleaner charges $200 per clean. If David asks his cousin to reimburse him for the cleaning fee, this is considered a booking fee and a levy of $15 is payable for the stay ($200 × 7.5%).
Is the levy imposed on a gifted short stay?
The short stay levy is imposed on the total booking fee payable for a short stay. If there is no fee payable because the stay is part of a promotion or part of a voucher gifted by the controller of the accommodation, then the stay is not subject to the levy.
In contrast, if a voucher is purchased and then gifted to another person who uses the voucher to pay for a short stay then the stay could be subject to the levy. The amount that was paid through the voucher is considered part of the booking fee for the stay.
Example
Bill's Bed and Breakfast in Red Hill gifts 3 midweek stays to a charitable organisation. No fee is received for the vouchers. One such voucher is donated to Dana, who uses it to book a stay at Bill's Bed and Breakfast. Bill does not charge any extra fees for the stay. The stay is not subject to the levy.
Is the purchase of vouchers subject to the levy?
The liability for the levy arises on completion of a short stay. Therefore, the purchase of a voucher is not subject to the levy. When a voucher is used to pay a booking fee for a short stay, this forms part of the total booking fee.
Once the stay is complete, a liability for the levy will arise. The liability will be calculated based on the total booking fee, which includes any amounts paid using the voucher and any other payments.
Where a renter is charged a fee for damage caused, is this subject to the levy?
The levy is imposed on the total booking fee for a short stay. Where a guest is charged a fee for damage caused to a property, this is not a fee charged for the stay, but is a charge to repair/restore the property to its original condition. Such amounts are not considered part of the total booking fee and therefore are not subject to the levy.
Are add-ons included in the total booking fee?
Charges for items which do not directly relate to the use of property as short stay accommodation may be excluded from your calculation of the levy, depending on how the item is charged.
Where there is a genuine option not to pay for the extra service (such as transportation from the airport), the amount paid for that component should not be included in the total booking fee and is therefore not subject to the levy.
Where the extra service is part of the accommodation booking and cannot be foregone by the guest for a cheaper rate (such as the use of a boat/bike at the property), the total paid is considered the total booking fee for the purpose of calculating the levy.
How is the levy calculated with package/bundle deals?
If short stay accommodation is booked as part of a bundle or package with other items that are not connected to the use of the accommodation, such as flights, a spa treatment or restaurant experience, the levy only applies to the cost of the accommodation component of the booking.
This is the total amount paid for the accommodation by the bundle provider, or if this is not possible, a calculation of what the accommodation would have cost without the other items.
Properties
What properties are not included in the levy?
The levy does not apply to a property that is someone’s principal place of residence (PPR), whether they own or rent the property. For example, say you own your home and live in it. If you go on holidays for 2 weeks, and you lease your home on Airbnb, any short stays that guests book and complete in that period is not liable for the levy. The same goes if you are renting your home. However, the levy applies to short stays in secondary residences and dwellings located on the same property as your PPR, such as granny flats, caravans and tiny homes.
The levy also does not apply to a hotel, motel, hostel or similar accommodation.
Other properties not included are:
- accommodation within a broader facility provided for the use of employees, contractors or other occupants of the facility, such as employee accommodation offered by schools and healthcare facilities or farm worker accommodation
- rooming houses, retirement villages, residential care facilities and supported residential services
- student accommodation provided in connection with an educational institution, such as university colleges
- temporary crisis accommodation provided on a non-profit basis by an agency that receives homelessness support funding from the Victorian Government as defined in the Public Health and Wellbeing Act 2008
- accommodation provided by or in connection with a facility to a contractor, employee or client of the facility.
How do I know if my accommodation is similar to a hotel, motel or hostel?
The short stay levy does not apply to stays in commercial residential premises within the meaning of section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth. This means if the premises are considered commercial residential premises for the purposes of GST, then a stay in the premises is excluded from the levy.
The ATO has published a ruling(the GST Ruling) which includes the characteristics of different types of premises (such as hotels, motels and hostels) and examples. Relevantly, the GST ruling provides that the following, among other things, are features of hotels:
- Meals are usually offered to guests, and they usually have a kitchen where meals are prepared for guests. The premises usually include a restaurant or dining room for guests.
- Rooms are often cleaned and serviced by staff on a daily basis, with the cost of these services being included in the room rate.
- There is usually a reception desk to handle the requirements of management and guests, particularly when guests check in or check out of the establishment.
The GST Ruling includes several examples concerning bed and breakfast accommodation (example 2), rooms in a house available for accommodation (example 3), farm stays (example 4) and individual holiday apartments (example 12).
Our website provides further guidance on commercial residential premises (which includes hotels, motels and hostels).
If you remain unsure as to whether your premises is commercial residential premises, you may wish to seek a private ruling from us.
What happens if my tenant leases my property as short-stay accommodation?
If your tenant is occupying the property as their PPR, then the short stay levy does not apply to any short stays at the property.
What if I use a booking platform but I believe my property is not liable for the levy?
You need to complete a declaration form available from us and give this to the booking platform. If your declaration is incorrect, both you and the platform are jointly responsible for any shortfall in levy payments. Platforms have the right to recover from you any levy amount they pay for you including any penalty tax or interest.
The declaration form is available on our website.
Does the levy apply to tiny homes and granny flats?
Yes, if the tiny home or granny flat is being rented out for short stays and it is not someone's principal place of residence. Payments made for the stay are subject to the short stay levy.
Does the levy apply to caravans?
Yes, but only if the caravan is being used as a residence that is rented for a short stay and is not located on a caravan park. The levy is not payable for the rental of caravans for the purpose of travelling in the caravan around Victoria.
What is my principal place of residence?
Principal place of residence means the property you occupy as your home. This is assessed objectively in light of the circumstances relating to actual occupation of a property, taking into account every place of residence of a person.
Can the levy apply to secondary premises on land?
Where a secondary premises (such as a granny flat or tiny home) is located on the same land as a principal place of residence, short stay bookings in the secondary residence are subject to the levy. However, any stays in the main residence that is used as a principal place of residence are not subject to the levy.
To be a secondary residence, the premises must be able to be occupied separately to the principal place of residence.
Example
Franco owns land that contains a main residence and a granny flat. He uses the main residence as his principal place of residence. The granny flat has a kitchen, bathroom, and its own entrance. Each short stay in the granny flat is subject to the levy.
If Franco rents out a room in his home for a short stay, or rents out his home for short stays when he goes on holiday, these stays are not subject to the levy.
Does the levy apply to premises which cannot be occupied separately?
Where premises cannot be occupied separately from the main residence (such as the bottom floor of a split-level home which uses the same entrance and shares a kitchen and bathroom), it forms part of the main residence and is not considered a secondary premises.
If the main residence is used as a principal place of residence, any short stays booked at the premises, including for part of the premises, are not subject to the levy.
What if my property is not suitable for long-term accommodation?
A range of properties are excluded from the short stay levy. However, there is no exemption solely related to whether or not a property is suitable for long-term accommodation.
Unless specifically excluded, the levy applies to short stays in any premises that can accommodate a person, and it does not matter if the premises are used for more than one purpose (e.g. a non-residential purpose) or whether or not the premises are permanent or temporary or fixed to land or mobile.
For mobile premises (e.g. a caravan), the levy only applies if the stay is for while the premises remain on the same site for the duration of the stay. A hire of a caravan to travel from site to site is not subject to the levy.
My property is used predominantly for non-residential purposes, does the levy apply to any short stay at the property?
Unless specifically excluded, the short stay levy applies to short stays in any premises that can accommodate a person, and it does not matter if the premises are used for more than one purpose (e.g. a commercial or non-residential purposes).
While commercial residential premises are excluded from levy, a short stay in land used predominantly for other commercial purposes can be subject to the levy.
Example
Jack owns land in a beachfront shopping strip. The land is predominantly used as a retail shop however the building includes a small studio apartment. Jack makes the studio apartment available for short stays through a booking platform.
Even though the land, and the building on the land, is predominantly used for commercial purposes, short stays in the studio apartment are subject to the levy.
What should I do if I believe my property is exempt?
If your property is within one of the specific exclusions, there are different requirements depending upon how you make your property available for short stays:
- For owners/renters who arrange short stays without a booking platform, you do not need to lodge a return in respect of short stays at a property that is excluded from the short stay levy. If you have other non-excluded properties for which you have arranged short stays, you will need to lodge a return detailing the short stays arranged at these properties.
- For owners/renters who use a booking platform to arrange short stays at your property, you need to provide the platform with a declaration in the approved form stating the basis upon which your property is excluded. The booking platform is required to retain this document and is required to provide it to us upon request.
Where can I find the excluded property declaration?
A copy of the approved form for the excluded property declaration can be found on our website.
Booking platforms
What is a booking platform?
A platform – online or not – that facilitates short stay bookings on behalf of accommodation providers, irrespective of whether that platform facilitates payment of any fee for the booking.
If I use a booking platform such as Airbnb, do I need to do anything?
No. Your short stay levy is calculated and paid by the booking platform. There is nothing you need to do.
What about a service that directs guests to another platform?
Platforms that do not arrange or confirm the bookings themselves are not liable for the levy. For example, listing services that advertise the accommodation but redirect guests to another platform or agent to make a booking are not liable for the levy.
Transitional arrangements
What if a guest made a booking in 2024 for a stay in 2025?
The short stay levy only applies to bookings made and completed on or after 1 January 2025.
The levy does not apply to bookings made before this date, even if the stay is completed on or after 1 January 2025.
What if I don’t know whether my booking fees will exceed $75,000?
The total amount of short stay booking fees received in the previous year will inform you as to whether you should lodge quarterly or annually.
Education
Where can I learn more about the levy and my obligations?
We are delivering an education program about the levy, including information sessions for property owners, renters, booking platforms, tourism associations, real estate agents and local councils. A series of webinars have been scheduled to further explain the levy and obligations for those who take bookings. Visit our website to register.
