NSW Considers Taxing Short-Term Rentals to Ease Housing Crisis
The New South Wales government is exploring the possibility of imposing a levy on short-term rental accommodation, such as Airbnb and Stayz, to address the state's housing shortage. The proposed levy would aim to encourage owners of short-term rentals and holiday homes to switch to long-term rental housing, and to balance the needs of the local visitor economy with the housing affordability crisis.
According to a discussion paper released by the NSW government, there are up to 35,000 homes across the state that are used as non-hosted short-term rental accommodation throughout the year, with the highest concentrations in the Byron Shire and along the state's south coast. A further 45,000 properties are used as holiday homes and another 15,000 dwellings are left vacant throughout the year. The discussion paper found that these under-utilised properties are having a negative impact on the availability and affordability of long-term rental housing, especially in regional areas.
Housing and Homelessness Minister Rose Jackson said the government was determined to do everything it could to address the housing crisis, and would not shy away from the tough decisions needed.uding short-term rental accommodation, vacant property and holiday homes."
The discussion paper suggested several options for regulating short-term rentals, including:
A booking tax on revenue from online short-stay rental platforms, similar to the 7.5 per cent levy introduced by the Victorian government in September 2023, which is expected to raise $150 million a year for social and affordable housing.
A vacant property tax on homes that are left unoccupied for more than six months a year, similar to the measures implemented in New York, London and Barcelona, which aim to discourage speculative investment and increase housing supply.
An annual cap on the number of nights that a property can be used for short-term rental, similar to the 180-day limit imposed in Paris, Amsterdam and Berlin, which aim to prevent the loss of long-term rental stock and preserve the residential character of neighbourhoods.
The discussion paper also proposed higher registration fees and stricter compliance requirements for short-term rental operators, as well as incentives and support for owners to transition to long-term rental housing.
The NSW government is seeking public feedback on the discussion paper over the coming weeks, and expects to complete the review in the first half of 2024. The review will be led by Ms Jackson, in collaboration with Treasurer Daniel Mookhey, Planning Minister Paul Scully and Better Regulation Minister Anoulack Chanthivong.
The review comes as the NSW government faces increasing pressure to tackle the housing crisis, which has seen rents skyrocket, vacancy rates plummet and homelessness rise across the state. The government has also committed to ending no-grounds evictions, increasing the supply of social and affordable housing, and reforming the planning system to boost housing diversity and affordability.
The short-term rental industry, however, has warned that any new taxes or restrictions could have a detrimental effect on the tourism and hospitality sectors, which are still recovering from the impacts of the COVID-19 pandemic and the bushfires. Airbnb and Stayz, the two leading online platforms for short-term rentals in Australia, have urged the government to consult with them and adopt a fair and balanced approach that recognises the benefits of home sharing for hosts, guests and communities.
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