Short-stay accommodation — Airbnb, Stayz, Booking.com — has transformed the Victorian property market and triggered a layered web of restrictions. Owners Corporations have new powers to restrict short-stay use under 2018 OC Act amendments. Some councils require planning permits for short-stays. The Victorian Government’s 2025 short-stay levy (7.5%) adds a tax. Buyers planning to use a property for short-stay rental must navigate all three layers, plus check that the building actually allows it.
This guide covers OC short-stay rules, council planning controls, the new 7.5% short-stay levy, and the Section 32 disclosure requirements for buyers planning short-stay use.
The three layers of regulation
| Layer | Authority | What it controls |
|---|---|---|
| Owners Corporation rules | OC under OC Act 2006 | Whether short-stay is permitted in the building |
| Council planning permit | Local council under PE Act 1987 | Whether short-stay use is allowed at the property |
| Short-stay levy | SRO under Short Stay Levy Act 2024 | 7.5% levy on short-stay revenue |
OC short-stay rules — the 2018 amendments
Section 169(1)(c) of the Owners Corporations Act 2006was amended in 2018 to expressly allow OCs to restrict short-stay accommodation. Specifically, the OC can:
- Make rules limiting short-stay rentals
- Require notification of short-stay use
- Apply for VCAT orders against problem short-stay operators
- Require compliance with the Short-Stay Code of Conduct
Common OC restrictions:
- Minimum tenancy duration (e.g. 90+ days, eliminating short-stay)
- No commercial use (interpreted to exclude Airbnb)
- Notification and approval requirements before listing
- Bond from short-stay operator to cover damage
- Cap on number of short-stay properties per building
Council planning permits
Short-stay rental of a residential dwelling is technically a change of use from “dwelling” to “hotel” or “tourist accommodation” in some council interpretations. Planning permit triggers vary:
- City of Melbourne, Yarra, Stonnington, Port Phillip. Generally do not require permits for short-stay in a dwelling — but require for purpose-built short-stay accommodation.
- Mornington Peninsula, Bass Coast. Specific short-stay permit requirements in some areas; capped numbers.
- Bayside, Glen Eira, Boroondara. Generally no permit unless conducted as commercial accommodation.
Always confirm with the specific council before listing. Penalty for unpermitted commercial use: typically $1,800 infringement per offence, plus potential court action.
The 7.5% Short-Stay Levy (from 1 January 2025)
Under the Short Stay Levy Act 2024 (Vic), every short-stay booking under 28 days attracts a 7.5% levy on the booking value. The levy applies to:
- All Victorian properties used for short-stay accommodation
- Every booking of less than 28 days
- Both whole-house and room-share arrangements
Operator obligations:
- Register with the SRO
- Collect 7.5% on each booking
- Remit quarterly
- Maintain records
Platforms like Airbnb collect the levy on behalf of operators. Direct booking arrangements require operators to handle themselves.
Section 32 disclosure
For buyers planning short-stay use, the Section 32 should disclose:
- Current OC rules on short-stay (full text)
- Any current OC litigation about short-stay
- Planning permits affecting use of the property
- Council planning property report showing zoning and overlays
- Any past complaints or council enforcement
Pre-purchase checks for short-stay buyers
- OC certificate disclosure. Read the OC rules for short-stay restrictions.
- OC meeting minutes. Check for recent rule changes or proposals about short-stay.
- Council planning permit search. Confirm short-stay is permitted at the property.
- Other apartments’ activity. Check Airbnb for other properties in the building. If many are listed, the OC has likely tolerated the use.
- Recent OC AGM resolutions. If the OC voted against short-stay, the rules may change soon.
- Levy registration. Confirm operator can register with SRO at the property.
Economics — short-stay vs long-term rental
| Aspect | Long-term rental | Short-stay (Airbnb) |
|---|---|---|
| Annual yield (Melbourne 2-bed apartment) | 3–4% | 5–8% |
| Operating costs | 8–12% of rent | 25–40% of revenue |
| Levies and taxes | Standard land tax | +7.5% short-stay levy |
| Tenant management | Property manager (8% fee) | Self or co-host (15–25% fee) |
| Furnishing required | No | Yes ($15k–$30k) |
| Vacancy risk | 2–4 weeks/year | 8–16 weeks/year |
| CGT main residence exemption | If short period (6-year rule) | Reduced or unavailable |
Net after-cost yield for short-stay typically 10–20% above long-term rental, but volatility is much higher and operational burden is greater.
Ready to check your contract? Upload your Section 32 or Contract of Sale at precontractreview.com for a pre-contract check — typically in just a few minutes.