AHURI BRIEF

Short stay accommodation regulation and legislation

Understanding the differences in short stay accommodation regulations across Australia

Last updated 3 Mar 2020

The recent Western Australian Government report ‘Levelling the playing field' (2019) into the impact of short-term rentals (STR) such as AirBnB in Western Australia shows the conflicted nature such housing ‘sharing’ strategies bring to the local community. The report’s authors acknowledge that ‘more than any other Inquiry we have yet tackled, this issue has proven remarkably complex and polarising. It has drawn a record number of submissions from around Western Australia and exposed an issue that is having a broad range of impacts, triggering a wide array of policy and community responses.’

STR brings in money for those who have surplus housing, and provides affordable accommodation for people who might not otherwise be able to travel to and experience a particular area (especially families with children). However, STR may also undercut local retail accommodation options (such as hotels) and lead to situations whereby rental housing becomes expensive and unavailable to lower income residents in high demand areas. STR properties may also inconvenience neighbours—particular where STR properties are used as party houses by tenants, but also through increased wear-and-tear on common property in apartment blocks and similar strata units.

AHURI research has identified that STR in Sydney and Melbourne is concentrated in high-demand inner city areas, but that, otherwise, across each city the impacts are less noticeable.

While the WA report recommended ‘imposing a light-handed state-level obligation to register Short-Term Rentals’ to ‘support State and local policymaking and regulatory functions’, only three Australian states (Tasmania, NSW and Victoria) have created legislation that places restrictions on the use of STR by property owners.

Tasmania

To-date Tasmania has enacted the strongest legislation with regards to STR.

Hosts in Tasmania are required to register with their local council for a permit or claim an exemption if they are eligible. In addition, the booking site (such as AirBnB) must collect information from hosts regarding whether they have or need a planning permit.

A host doesn’t need a planning permit if they meet the ‘home-sharing’ exemption, which applies if the dwelling is used by the host (as owner or occupier) as their main place of residence and:

  • the dwelling is only let to visitors while they are on vacation or are temporarily absent, or
  • visitors are accommodated in not more than four bedrooms while the host is living there.

To be able to be eligible for a permit a property must:

  • be located within an appropriate planning zone (e.g. General Residential Zone; Inner Residential Zone etc.)
  • not be located in the Battery Point Heritage Precinct (BP1)
  • house guests within existing habitable buildings (not just houses)
  • not have guest accommodation occupying more than 200m2 gross floor area per lot
  • not be part of a strata title arrangement that includes another dwelling
  • met all other requirements necessary for a ‘Permitted’ use.

NSW

NSW has introduced legislation which aims to control STR in that state, particularly in Sydney.

In particular the legislation creates ‘exempt’ and ‘complying’ approval pathways that enable STR within defined day limits:

  • Where the host is present (i.e. the guest stays in a room in the host’s house while the host is present), STR is ‘exempt development’ for 365 days per calendar year
  • Where the host is not present, and the site is not on bushfire prone land or a flood control lot, STRA is ‘exempt development’ for:
    • 180 days in Greater Sydney
    • 365 days in regional areas; except where a local council varies this to no lower than 180 days.

Victoria

The Victorian Government introduced changes to the Owners Corporations Act in February 2019 to help prevent apartment buildings being used to host unruly parties.

The reforms ‘allow owners corporations and residents to take action against owners and guests, who are now jointly and individually liable for any compensation, fines, and awards for damage to common property.’

If an apartment owner/ manager is issued with three breach notices in a 24-month period, VCAT will be able to make orders restricting that apartment from being let for short-stay purposes for a period of time.