Last reviewed: 27 July 2026. Victoria introduced a statewide short stay levy on 1 January 2025 and gave owners corporations the power to ban short stays. Any guide written before 2025 misses both.
The short version
- Victoria charges a 7.5% short stay levy on stays of fewer than 28 consecutive days, in force since 1 January 2025.
- The levy is on the total booking fee, including cleaning fees and GST. Not just the nightly rate.
- Your principal place of residence is exempt. But a granny flat or second dwelling on the same property is not.
- You only register with the State Revenue Office if you take direct bookings. If everything goes through a platform, the platform handles it.
- Victoria has no statewide night cap. This is unusual and more permissive than NSW.
- But individual councils are introducing their own caps, some as low as 90 nights.
- An owners corporation can ban short stays by 75% special resolution, and that ban cannot touch a lot that is the owner's principal place of residence.
- The checkout day is disregarded when counting days for the levy.
The short stay levy
The Short Stay Levy Act 2024 introduced a 7.5% levy on short stay accommodation bookings from 1 January 2025. Revenue goes to Homes Victoria, with a quarter of it directed to regional Victoria.
What counts as a short stay. Any stay for a continuous period of fewer than 28 days. In calculating the days booked, the checkout day is disregarded.
What the 7.5% applies to. The total booking fee, meaning the total amount paid for the stay. That includes charges such as cleaning fees and GST payable on any component of the booking. It does not include amounts charged for using a particular payment method, such as a credit card surcharge. If you charge one all-inclusive fee, calculate the levy on that fee.
Round down to the nearest 5 cents where the levy is not a multiple of 5 cents.
A worked example from the SRO: if the total booking fee is $1,000, the levy is $75.
Cancellations. Bookings that are cancelled and where the total amount is waived, credited or refunded are not liable.
Timing. The levy applies only to bookings made on or after 1 January 2025.
Sources: State Revenue Office Victoria, Understanding the short stay levy and Short stay levy frequently asked questions
At a glance
| Question | Short answer |
|---|---|
| Levy rate | 7.5% of the total booking fee |
| What is a short stay? | Fewer than 28 consecutive days |
| Is the checkout day counted? | No |
| Does it include cleaning fees? | Yes, and GST |
| Is my own home exempt? | Yes, if it is your principal place of residence |
| Is my granny flat exempt? | No |
| Must I register with the SRO? | Only if you take bookings outside a platform |
| Statewide night cap | None |
| Council night caps | Some, varying by area |
| Can my owners corporation ban it? | Yes, by 75% special resolution, but not for your PPR |
Who has to register
This is the point most often misunderstood, and it is refreshingly simple.
If all your bookings go through a platform, such as Airbnb or Stayz, registration is not required. The platform is the registered entity and collects and remits the levy.
If you accept any bookings without using a platform, you must register with the State Revenue Office before lodging your first return, and you are responsible for the levy on those bookings.
Many Melbourne operators run a mix. If even one booking comes direct, that puts you in the registration category for those bookings.
The SRO also runs free short stay levy education sessions, which is a genuinely useful resource if you are setting up a direct booking channel.
The exemptions, including one big trap
Your principal place of residence is exempt. If you let your own home while you are away, the levy does not apply.
But here is the trap. The levy does apply to short stays in secondary residences and dwellings located on the same property as your principal place of residence. That expressly includes granny flats, caravans and tiny homes.
So letting your own house while on holiday is exempt. Letting the bungalow at the bottom of your garden is not. A great many Melbourne operators assume the PPR exemption covers everything at their address. It does not.
Other exclusions:
- Hotels, motels, hostels and similar accommodation are not caught by the levy
- Temporary crisis accommodation provided on a non-profit basis by an agency receiving Victorian Government homelessness support funding, as defined in the Residential Tenancies Act 1997
- Properties used predominantly for non-residential purposes may fall outside it
An excluded property declaration exists for properties you believe are exempt. If you think an exemption applies, make the declaration rather than simply not paying.
No statewide night cap, but check your council
Victoria has no statewide annual night cap. This is a genuine difference from New South Wales, where non-hosted stays in Greater Sydney are limited to 180 days, and a common source of confusion between the two states.
Most Victorian residential zones also do not require a planning permit for short stay use.
However, individual local councils can and are introducing their own limits. Reporting indicates that some areas, including parts of inner Melbourne and the Mornington Peninsula, have moved to restrict unhosted properties to as few as 90 nights per year, and that local registration requirements are appearing in some municipalities.
Restrictions vary significantly by area, and this is the fastest-moving part of the Victorian picture. Check your specific council rather than relying on the statewide position.
Owners corporations can ban you
The Short Stay Levy Act 2024 did two things. The levy was the headline. This was the structural change.
From 1 January 2025, an owners corporation can make rules prohibiting the use of lots for short stay accommodation, by special resolution requiring 75% of owners.
The critical carve-out: that ban cannot apply to a lot that is the owner's or renter's principal place of residence. If you live in the property, a valid owners corporation ban does not stop you hosting. If you are an investor who does not live there, a properly enacted ban does apply to you.
Owners corporations can also apply to VCAT to prohibit a specific lot where there have been repeated breaches, and many CBD buildings enforce restrictions through owners corporation rules.
For most Melbourne investors, the owners corporation is now the most likely source of an existential problem, more so than the levy or any council cap. Read the owners corporation rules before you buy, and check whether a resolution has been passed or is being considered.
Consumer Affairs Victoria publishes guidance on owners corporation rules and dispute processes.
Practical points on pricing and platforms
Two operational consequences worth planning for.
Platform mechanics differ. Where a platform collects and remits the levy, how it appears to guests and how it affects your payout varies between platforms. Confirm with each platform you use whether the levy is added to the guest's price or deducted from your payout, because that determines whether you need to adjust your rates.
Direct bookings need a process. If you take direct bookings you must register, calculate the levy on the total booking fee, lodge returns and pay. Build it into your booking flow or property management software rather than calculating it manually.
The levy is separate from income tax. It is not a deduction question or an income tax matter. Get accounting advice on how to account for it correctly.
A practical checklist
- Determine whether the property is your principal place of residence
- If it is a granny flat, second dwelling, caravan or tiny home on your PPR property, assume the levy applies
- Check whether you take any bookings outside a platform. If so, register with the SRO
- Confirm with each platform whether it collects and remits the levy, in writing
- Calculate the levy on the total booking fee, including cleaning fees and GST
- Remember the checkout day is disregarded when counting days
- Check your local council for night caps and local registration requirements
- Read your owners corporation rules, and check for any short stay resolution
- If you believe an exemption applies, lodge the excluded property declaration
- Adjust pricing to reflect how your platform handles the levy
- Take accounting advice on the levy and on income tax separately
Verified official sources
- State Revenue Office Victoria, Understanding the short stay levy
- State Revenue Office Victoria, Short stay levy FAQs
- Parliament of Victoria, Short stay accommodation to be taxed and regulated
- Victorian Parliamentary Budget Office, analysis of the short stay levy (PDF)
Named, not linked
- Short Stay Levy Act 2024
- Owners Corporations Act 2006, as amended, for the 75% special resolution power
- Consumer Affairs Victoria, for owners corporation rules and dispute processes
- Residential Tenancies Act 1997, referenced in the crisis accommodation exemption
- VCAT, for owners corporation applications regarding specific lots
- Your local council, for night caps, local registration and planning requirements
- The Australian Taxation Office, for income tax treatment of short stay income
Important disclaimer
This article is not legal, tax or financial advice. It is general information written for a non-specialist reader, by a key management company rather than a law firm.
Victoria's position has two easily-missed features: the principal place of residence exemption does not extend to a granny flat or second dwelling on the same property, and registration with the State Revenue Office is required only where you take bookings outside a platform. Victoria has no statewide night cap, but individual councils are introducing their own and this is changing quickly. Your owners corporation can prohibit short stays by 75% special resolution unless the lot is your principal place of residence.
Verify with the State Revenue Office, your local council and your owners corporation before acting. For an investment decision or an owners corporation dispute, engage an Australian lawyer and an accountant.
If you spot an error, an omission, or something that needs updating, please tell us and we will fix it.
