City Leaves Melbourne Short-Stay Laws Up to State

Melbourne has dropped plans for its own laws to curb short-term renting, handing the issue back to the state.

The city council, at a meeting of its Future Melbourne Committee this month, made the call not to proceed with putting a law in place because the Victorian Government is promising to remove council charges on short-stay accommodation.

City planning officers estimate that about 14 per cent of the City of Melbourne’s residential stock (more than 4100 homes) are being used for short-stay accommodation, making the city one of the largest short-term rental markets in the country.

That has impacted housing for key workers and students, which led to the council initiating consultation on the issue.

In September, 2023, the city began work on developing laws to transition short-term accommodation to long-term rentals.

The state government then announced a new levy of 7.5 per cent on short-stay accommodation as part of the Victorian Housing Statement delivered just before the-then premier Daniel Andrews stepped down.

▲ Melbourne Town Hall: the City will not implement a law for short-stay accommodation.

The levy applies to short-stay accommodation from January 1, 2025. In the same announcement it was noted that other council charges would be lifted.

Planning officers told the city that that although several approaches and levers were needed to address the housing crisis, the levy would negate the need for regulation at the local government level.

They proposed that the council not move ahead with local laws. The city also resolved that a register be maintained, that its policy stance of tracking and regulating the asset class remains firm, and that management continue to engage with the state government on the issue.