Victorian Government Defends Short-Stay Levy Amid Airbnb's 'Triple Tax' Criticism

The Victorian government on Tuesday rebutted claims that its new levy on short stay accommodation will damage the tourism industry, following Airbnb's full-page newspaper ad campaign, calling it "unfair triple tax plan."

Last week, the Victorian government introduced a bill in Parliament to impose a 7.5% tax, dubbed as nation-first levy, on revenue from short-term stays booked for less than 28 days through platforms like Airbnb and Stayz, starting from Jan. 1.

On Tuesday, Airbnb published full-page advertisements in newspapers with the title, "The Victorian Government wants to triple tax your holiday. What's next?"

Airbnb attacked the government plan to levy short stay tax together with GST and council charges, which it said amounted to an "unfair triple tax plan."

The booking platform claimed the levy would limit the choice for families as it added to their travel costs. The new levy would bring down the tourism business, it claimed, reported Sky News.

"This means higher holiday costs, fewer accommodation choices, especially for families (and) less income for local businesses," Airbnb said. "We urge the government to reconsider this plan that will damage tourism and increase costs for Victorian families."

Airbnb Australia and New Zealand public policy head Michael Crosby pointed out that the levy would jeopardize the economic benefits from short rentals, reported The North West Star.

"A 7.5 percent levy, in addition to the potential for more council-led fees and restrictions on the number of nights owners can host, will jeopardize the ability for Victoria to attract tourists to areas lacking traditional accommodation, and penalize families looking to travel as cost-of-living pressures continue to bite," he said.

However, Health Minister Mary-Anne Thomas refused to buy into the argument that government measures would affect the tourism industry. The state had consulted local government, tourism operators and industry while forming the plan, she added.

"We think that this strikes the right balance in ensuring that we have accommodation available for workers, including those in destination towns," she said. "As the Member for Macedon I'm well aware of the real challenges that tourism operators face in my own electorate getting the workforce that they need. And the reason they can't get a workforce is because there is nowhere to live."

The government claimed that it expected to raise AU$60 million from the new levy, which would be channelized to fund social and affordable housing in Victoria.

Besides the 7.5% tax, the local councils and owners' corporations have been authorized to block short stay rental accommodation in their area. Primary residences, hotels, motels and caravan parks have been exempted from the short-stay levy.