With the introduction of Victoria's Short-Stay Levy in January 2025, hosts in the state will need to adapt their pricing and tax settings to account for this new tax on short stays (28 days or less). If you're a host based in Victoria or manage properties there, you may be wondering how to configure your account to ensure this tax is applied correctly.
Overview of the New Tax
Starting January 1, 2025, a new Short-Stay Levy will apply to short stays of 28 days or less in Victoria, Australia. This tax is designed to target short-term rental properties that cater to stays under 28 days, and it will not apply to bookings of 28 days or more.
The general approach involves configuring tax settings based on the length of stay, but how does this translate to our platform?
How to Set Up the Tax Levy in Our System
Currently, our system is optimized for tax configurations based on fixed day counts (e.g., "X days or more"). Since the new tax applies to stays of 28 days or less, it’s understandable that you might be unsure how to adjust for this.
Here's a quick guide on how you can manage the Victoria Short-Stay Levy within our system:
Step 1: Apply a 0% Tax Rate for Stays of 28 Days or More
To ensure the Short-Stay Levy is applied only to stays of 28 days or less, you can configure your tax settings as follows:
- Navigate to your Tax Settings. Go to your property tax settings in your account
- Create a New Tax Rule. Add a new tax rule for the Victoria Short-Stay Levy
- Set the Day Threshold. Apply the tax rule for stays of 28 days or less. For stays longer than 28 days, apply a 0% tax rate to avoid any incorrect taxation.
This should cover the basic setup for managing this new tax on our platform.
Step 2: Tax Collection by OTAs
Some Online Travel Agents (OTAs), such as Airbnb, are expected to collect and remit the tax on behalf of hosts. Other OTAs like Vrbo are still working out their systems but may take longer to implement remittance. Booking.com has its own tax system and may handle the collection and remittance of taxes independently. We recommend checking directly with Booking.com to understand their specific process for the Short-Stay Levy.
Our recommendation: Check with each OTA (e.g., Airbnb, Vrbo, Booking.com) to confirm how they will be handling the tax collection and remittance for stays in Victoria. For now, it seems that Airbnb is ready to handle it, while Vrbo may need additional setup.
Step 3: Testing and Verification
Once you’ve set up the tax settings, test a few bookings that are both under 28 days and over 28 days to verify that the tax is applied correctly. If you run into any issues, don’t hesitate to reach out to our support team for further assistance.