A Modest Revenue Generator
The ACT government has introduced a 5% levy on short-term rental bookings, effective from July. While the levy is expected to generate revenue and level the playing field with other accommodation providers, its impact on increasing housing supply is projected to be "very modest."
The government estimates the levy will raise $3.8 million in its first year, increasing to $4 million by 2026-27. This revenue will primarily be used to generate income and create a more equitable tax landscape for different accommodation providers.
While the levy may incentivize some short-term rental properties to switch to long-term rentals, the primary goal is not to significantly impact housing supply. The government acknowledges the need for more housing but views the levy as a revenue-generating tool rather than a solution to the housing crisis.
The levy has drawn criticism from industry stakeholders. Stayz argues that the levy will disrupt travelers and hosts, while Airbnb advocates for a mandatory registration scheme to provide a clearer picture of the short-term rental sector.
The ACT Greens also believe the levy falls short of addressing the housing crisis, emphasizing the need for additional measures to increase affordable housing options.
Overall, the short-term rental levy is primarily a revenue-generating tool with a limited impact on housing supply. While it may incentivize some property owners to switch to long-term rentals, it is not intended to be a significant solution to the housing crisis. The levy has drawn criticism from industry stakeholders, and the ACT Greens believe it falls short of addressing the housing needs of the territory.