Victoria’s short-stay levy hasn’t slowed STR growth, but other states are still following suit

In Australia, Victoria’s new short-stay levy is shaking up the rental market and prompting other jurisdictions to look at how they are managing and taxing short-term rentals (STRs).  

First announced in August 2023,  the 7.5% levy on short-term accommodations in the Australian state of Victoria came into effect on 1 January 2025. The levy covers bookings of fewer than 28 consecutive nights on platforms such as Airbnb and Stayz. Introduced as part of the state’s housing affordability strategy, the policy aims to shift more properties from the short-stay market back into long-term rental supply.  

According to government figures, Victoria is home to around 63,000 short-term rental properties, with nearly half located in regional areas. Of these, almost 50,000 are entire homes currently unavailable to long-term renters. 

While comprehensive data on the levy’s full impact is yet to emerge, early signals suggest its influence may be limited.  

According to Rentalscape, the number of STR listings in Victoria rose 4.2% between April 2023 and April 2024, and 6.6% year-on-year to April 2025—up from 70,059 to 77,783. Unique properties climbed from 43,233 to 47,928. 

This continued growth suggests broader forces at play, such as the post-COVID rebound in tourism, which may be outweighing the influence of the new levy, at least in the short term.  

Sources: Rentalscape, ABS Census 2021  

 
Is the levy targeting the right areas? 

Eacham Curry, Senior Director at Stayz argued the levy does little to address broader regulation concerns, since most short-term rentals are not located in areas with the greatest housing need. “The 7.5 per cent increase means owners need only remove themselves from listing on platforms to avoid paying the levy, and the Victorian government may end up getting nothing at all,” Curry told 7 News. 

But Rentalscape data paints a more nuanced picture. 

It’s true that inner Melbourne and the Mornington Peninsula account for the largest number of STRs. Yet nearly one-third of all STR properties sit in just four regional shires - Bass Coast, Surf Coast, Alpine and Hepburn, all of which have formally acknowledged a housing crisis.  

The takeaway: while the levy reaches some of the most pressured regions, early growth data suggests it will be unlikely to move the needle without better enforcement mechanisms  and market visibility. 

Why off-platform listings matter

STRs that do not list on major platforms can make up a significant portion of the total market. Rentalscape data shows that in the United States, 15% of STRs are advertised outside the major platforms. It's a major reason that governments should handle STR taxation and revenue collection themselves.  

Deckard Technologies CEO, Nick Del Pego, says: "If you rely on the platforms to collect tax on your behalf, you are potentially missing a large number of properties. That means you are creating fairness and equity issues, as well as potentially leaving revenue on the table." 

What other states can learn 

Despite these early challenges, Victoria’s levy is already influencing policy nationwide. In February 2025, the Tasmanian state government announced a 5% levy to encourage housing availability and affordability. A month later, the Australian Capital Territory government introduced a bill to impose a 5% levy on short-term accommodation in Canberra, set to take effect on July 1, 2025. 

ACT Treasurer Chris Steel said Victoria’s rollout had directly informed the territory’s approach. “We have looked very closely at the Victoria model. There were significant issues with the implementation of the levy. We have learnt from that,” he said.  

As Victoria’s short-stay levy continues to reshape the market and regulatory momentum builds across states, access to accurate, timely data will be essential in achieving effective STR compliance. Despite the policy’s intentions, listings have continued to grow, suggesting the levy alone may not be enough to shift market behaviour. 

For policymakers, the real challenge lies in capturing the full picture—especially activity happening beyond the major platforms—to design fair, enforceable regulation that delivers on housing and revenue goals. 

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