State Member for Murray Plains Peter Walsh says a Coalition government would repeal the new short-stay levy if elected in the 2026 Victorian state election.
The 7.5 per cent levy will place unsustainable pressure on the short-term rental industry amid additional state and federal charges, he said.
The state Nationals leader said the industry had been unfairly targeted, with the Victorian Government using short-stay providers as scapegoats for housing shortages.
Echuca Holidays Homes directors Kye and Jess Andersen, who manage 50 properties in the Echuca-Moama area, said the government had misunderstood the short-stay industry.
Mr Andersen said local operators provided essential services, including cleaning, maintenance and emergency housing.
“Short-term rentals are not just for tourists,” Mr Andersen said.
“More than 40 per cent of our business supports essential workers, healthcare professionals, sporting teams, families in crisis and people with disabilities.
“This tax threatens to undermine those services in regional areas where accommodation options are already limited.”
Mr Andersen said the levy could have a broader economic impact, affecting his company’s employees and local businesses hired for property upkeep.
“Every rental that exits the market because of increasing taxes and red tape will have a ripple effect on the local economy,” Mr Andersen said.
Mr Walsh has joined the Australian and New Zealand Short Stay Rental Accommodation Association, known as ASTRA, to call for exemptions.
Protections for key workers, disabled individuals and domestic violence survivors should be in place, as taxing these groups would be unjust, Mr Walsh said.
The Short Stay Levy Bill 2024 was announced in September and is set to be enacted at the beginning of next year.
Victorian Treasurer Tim Pallas said revenue collected from the bill would be allocated to Homes Victoria, with 25 per cent of funds earmarked for regional Victoria.
The levy is included for bookings made through booking platforms such as Airbnb and Stayz.
“While short-stay accommodation has become a popular feature of Victoria’s visitor economy, it has reduced the ability for many properties to be used for longer-term accommodation,” Mr Pallas said.
ASTRA chair Yoav Tourel said he doubted the government’s ability to implement the levy by its January 1 deadline.
Mr Tourel said a similar bill in Western Australia involved extensive consultation and was still being refined, while Victoria’s approach had been rushed.
Further threats were posed to short-stays, Mr Tourel said, with local councils given power to cap the number of rental nights on short-term rentals under the bill.
“Mr Walsh and ASTRA agree the tax will discourage investment in both short-term and long-term rental markets, worsening the state’s housing crisis rather than helping solve it,” he said.