Airbnb says hotels should also be forced to pay Victoria’s short-stay tax

The Victorian government has shot down a push to expand a contentious short-stays levy to all accommodation bookings, including Melbourne hotels.

Former premier Daniel Andrews last month unveiled an Australian-first, statewide levy on short-stay platforms such as Airbnb and Stayz.

The consumer-facing 7.5% levy is slated to come into effect from 2025 and raise $70 million a year to build and maintain social housing amid weak supply and soaring rents.

Airbnb Australia and New Zealand public policy head Michael Crosby said the San Francisco-based giant was disappointed the levy strictly targeted short-stay platforms.

“We support the concept of using this revenue for use in new housing projects,” he said in Melbourne on Wednesday.

“But we have said the levy would raise a lot more and cost consumers less if it was completely accommodation agnostic and it applied to any form of accommodation.”

The levy was a headline policy from the state government’s long-awaited housing statement, which set a target to build 800,000 homes in Victoria in the next decade.

Airbnb is not against the user-pay levy but was pushing for a rate of three to five percent.

It also wants the government to explore a threshold or a tiered structure so people booking cheap rooms do not face the same rate as those staying at more expensive homes.

“We think that 7.5 percent levy will have a bit more of a disproportionate impact on budget accommodation,” Crosby said.

“The average price of a room on Airbnb is about $104 a night.

“We want that budget option to be there for budget-conscious travellers or people who need affordable accommodation options.”

Crosby suggested the government’s next step would be to create a working group to implement the levy and that Airbnb still had unanswered questions.

“It’s difficult to see how the levy will actually result in an increase in the properties available to long-term rentals across the state,” he said.

Tourism Minister Steve Dimopoulos disputed that the levy would not ease pressure on the long-term rental market and flagged the government would not reconsider the exemption for hotels.

“The most important issue facing Victorians right now is the housing crisis,” he told reporters.

“Airbnb provides a valuable service to many communities across Victoria and regional towns but it also does take away housing stock.

“The purpose of that levy on Airbnb was to shift a little bit of the market back to what people need, which is a home to live in.”

Accommodation Australia Victorian general manager Dougal Hollis said it was a common-sense approach, as hotels and pubs offering accommodation did not contribute to the removal of housing stock.

“Commercial accommodation providers already operate in a highly regulated business environment, with a raft of related compliance costs,” he said.

“By contrast, short-term rental accommodation has very little regulatory costs and the number of properties taken off the long-term rental market for short-stay use keeps rising.”

NSW will look at Victoria’s levy, potentially paving the way to follow suit.

Crosby said the platform was in discussions with other states, which he indicated were monitoring Victoria’s levy closely.

An independent report from Oxford Economics shows Airbnb contributed $3.7 billion to Victoria’s gross state product and supported almost 95,000 nationwide jobs in the 12 months to March 2023.

This article was first published by AAP.