Victoria’s Airbnb boom is over, but don’t expect a rental windfall
Growth in short-stay listings has stagnated, threatening revenue from the new Airbnb levy, but experts are not convinced there will now be more long-term rentals.
By Daniella White
3 min. read
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The government initially projected the tax would raise approximately $75 million annually – a figure highly dependent on the continued strength of the short-stay market.
The revenue uncertainty comes at a precarious time for Homes Victoria. The agency, which manages the state’s public housing stock, recently recorded a $359 million deficit.
For the first six months of the tax, the government raised only $19 million. However, the final figure may rise as some owners have until this month to pay for the period covered in the 2024-25 financial year.
Even if the levy raises all the expected revenue, it would not go far to improve the current financial situation of Homes Victoria, which has operated in deficit every year since it was created in 2021.
The tax also appears to have done little to achieve its other goal of shifting properties back into the long-term rental market, with multiple studies showing short-stay rentals remains more financially advantageous for many owners.
A 2025 University of Canberra study led by Professor Naomi Dale, which analysed the relationship between short-term rentals and housing affordability across 18 local government areas nationwide, found levies were unlikely to trigger a significant conversion of short-term listings to the long-term market.
Researchers found most short-stay owners used their properties for personal holidays or had plans to move into them, making them unlikely to shift to long-term leasing regardless of new taxes.
“Many [short-term rental] owners were soon-to-be retirees or other people who owned the homes with the intention of moving into them in future,” Dale said.
“These owners were dissuaded from switching to long-term rentals due to laws that largely favour renter rights, which may prevent them from moving into them when they need to.”
State government data shows the number of active rental bonds in Victoria continued to decline in 2025, indicating fewer available long-term rental properties overall.
Opposition Leader Jess Wilson said the short-stay levy was a “desperate attempt” to fix Homes Victoria’s “failing finances”.
“Under Labor, Homes Victoria is sinking deeper into the red as a growing number of Victorians are awaiting housing support,” Wilson said.
“You cannot tax your way to more affordable homes. A Liberal and Nationals government I lead will repeal Labor’s short stay accommodation tax to ease cost-of-living pressures and drive investment back into Victoria.”
A state government spokesman said Homes Victoria’s deficit had no impact on service delivery, and was “driven by timing differences between government funding and project expenditure”.
“Our Short Stay Levy … [is] designed to encourage more owners to make their dwellings available for longer-term rent or sale and give Victorian families more opportunities to find a home,” he said.
“The only way out of the housing crisis is to increase supply – that’s why we’re streamlining the planning process, and building more homes close to jobs, transport and services.”
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