Ms Lovell said the Victorian Government’s new Holiday and Tourism Tax, which is to come into effect on January 1, 2025, would add more than $100 to the cost of a long weekend away and impact the economies of Victorian tourist destinations located on the Murray River.
Ms Lovell feared that NSW towns on the Murray would benefit from tourists seeking the same experience without the added prices.
“Tourists will decide to stay in cheaper accommodation, and this tax is just another blow to regional small businesses by the uncaring and broke Labor Government,” Ms Lovell said.
Yarrawonga Mulwala Tourism and Business Executive Noel Wright echoed Ms Lovell’s criticism of the new tax.
“Any move to tax a particular industry is completely inconsistent and therefore thwart with issues,” Mr Wright said.
“Regional tourism is currently on its knees having dealt with bushfires, the COVID pandemic and the recent floods. It has been a tough four years for regional Victorians both financially and socially. And the idea of adding to people’s holiday costs with a tax on top of the inflationary pressures all Australians are experiencing is madness.”
Mr Wright believed many owners will have no choice but to pass on the extra costs associated with the tax to short stay guests.
“People are doing it tough, they need holiday breaks, they don’t need holidays that break them,” he added.
Almost half of Victoria’s 36,000 short-stay accommodation properties, such as Airbnb or Stayz, are in regional Victoria and the number of homes listed on these accommodation websites has grown considerably over the last few years in Yarrawonga Mulwala.
Ms Lovell said the new tax would not only negatively affect accommodation providers but ultimately reduce tourism revenue.
“While Labor’s Holiday and Tourism Tax will hurt all Victorian short-stay accommodation providers, those in Victorian border towns in my electorate such as Echuca, Cobram, Yarrawonga, Mildura and Wodonga will be impacted the most,” Ms Lovell said.
However, a Victorian Government spokesperson has refuted the idea that border towns are going to be uniquely impacted.
“The levy will not impact regional tourism,” the spokesperson said.
“Regional Victoria, including border towns, have great nationally and internationally renowned attractions.
“This will not change because of a modest levy invested back into regional communities to help house more regional Victorians.
“It applies equally across Victoria with 25 per cent of the revenue to go towards regional Victoria to pay for more and better social and affordable housing.”
However Victoria Tourism Industry Council (VTIC) Chief Executive, Felicia Mariani, said the extra tax could not come at a worse time, with the latest Tourism Research Australia data showing domestic overnight tourism spending in regional Victoria fell 21 per cent in May, and 16 per cent in June, compared to the same time in 2022.
“VTIC lobbied hard against the proposed bed tax, and we’re relieved the tax will not apply to hotels and motels, but it’s a terrible time for any new consumer tax on holidays,” Mariani said.
“What the Victorian Government is proposing is not a tax on short-stay platforms or property owners, it’s a tax on consumers who rent those properties.
“If you’re a family that spends $1000 on a rental, get ready to pay an extra $75 to the state government. That’s money that would otherwise flow into local shops, cafes, or tourism experiences during your holiday.
“Asking consumers to pay more for their holiday rental won’t magically increase housing supply. This policy will not encourage property owners to take their houses off Airbnb and return them to the long-term rental market.”
NSW considering tax
The New South Wales government is considering following Victoria’s lead by also imposing a tax on short-stay accommodation, including Airbnb, to help fund affordable housing.
The NSW premier, Chris Minns, and senior ministers said they were open to imposing a levy to boost revenue and encourage owners to put their properties back on the long-term market amid the ongoing housing crisis.
The treasurer, Daniel Mookhey, has ordered Treasury to study Victoria’s 7.5% tax and examine the impact of similar measures overseas.
“We are looking at what Victoria has proposed,” he said.
Mookhey said short-term rentals were part of why “rental stock in NSW is disappearing”.
The state government has been considering caps on short-term rentals, including Airbnb and Stayz properties, as well as a separate 60-day limit for homes in the Byron Bay region following advice from the Independent Planning Commission.
There were 45,209 short-term rentals registered in NSW in May – an increase of 13,000 since December 2021.
