Melbourne Short-Term Rental Regulations: A 2026 Guide For Airbnb Hosts

Do you own a place in Melbourne and you're weighing whether to put it on Airbnb or Vrbo? Well, the good news is that you can, and the City of Melbourne won't ask you for a permit, a licence or a registration to do it. The council spent September 2023 consulting on a local law that would have charged $350 a year and capped every property at 180 nights, and it never came into force. Its own Short-Term Accommodation Policy page still records the whole thing as paused, pending the state levy that arrived instead.

So where's the catch? It sits in two places, and neither of them is the council. Victoria has charged a 7.5% short stay levy on every booking under 28 nights since 1 January 2025, and your owners corporation can now vote to prohibit short stays in your building outright. That second one bites harder than the tax does, because 84% of Melbourne's short-stay stock sits in the CBD, Southbank, Docklands and Carlton, which is exactly where apartment towers have large, organised owners corporations.

So let's walk through what it takes to do this properly in the City of Melbourne, in the state of Victoria: what the law asks of you in 2026, what the levy costs and who hands it over, when you have to register with the State Revenue Office and when you don't, how any of it gets enforced, and who to call when something goes sideways. Every figure below comes from Victorian legislation, the State Revenue Office, the ATO or the council's own pages, checked in July 2026. And before you commit to a Melbourne apartment on the strength of a nightly rate, run it through BNBCalc first.

What are Short-Term Rental (Airbnb, VRBO) Regulations in Melbourne, Australia?

Since the council isn't the regulator here, the question then becomes who is. Three separate bodies of law reach a Melbourne short-term rental, and not one of them is a City of Melbourne local law:

• State tax law. The Short Stay Levy Act 2024 imposes a levy on short stays and defines the whole category. A "short stay" is occupation of premises for a continuous period of less than 28 days, so a 27-night booking is levied and a 28-night booking isn't.
• Strata law. The same Act quietly amended the Owners Corporations Act 2006, and that amendment is the one that can end your business. Schedule 1 now lets an owners corporation make a rule prohibiting the use of lots as short-stay accommodation.
• Building law. The Building Act 1993 and the building regulations decide what class your building is, and a serviced-apartment style of use can push an apartment out of Class 2 and into the far heavier Class 3 requirements. Melbourne is where that fight actually happened, which I'll come back to.

Now notice what's missing from that list.

No council permit to apply for. No annual fee, no night cap, no guest cap, no mandatory local contact person and no inspection regime. The council consulted on exactly those things in 2023 and then stopped, and its project page has recorded the consideration as paused ever since.

Planning is the one area where I'd check your specific address rather than take a general answer. Going through the council's own pages, I couldn't find any short-stay planning permit that the City of Melbourne issues or requires, and using your own dwelling as a dwelling doesn't obviously become a different land use because the occupants change often. Heritage overlays and site-specific permit conditions are another matter, though, and those turn on your title rather than on any short-stay rule.

Starting a Short-Term Rental Business in Melbourne

Of those three layers, the one that decides whether you have a business at all is your owners corporation. So that's where the due diligence starts, and it should happen before you buy, not after.

Schedule 1 of the Owners Corporations Act gives an owners corporation the power to make a rule headed "Prohibition on use of lots as short-stay accommodation". One carve-out is written into the same clause. The rule cannot stop an owner, lessee or sub-lessee from providing a lot as short-stay accommodation if that person occupies the lot as their principal place of residence.

Read that carefully, because it draws the line that matters. Rent out the spare room in the apartment you live in and no rule can touch you. Buy an investment unit you never live in and a single vote can shut it down.

That vote is a special resolution. Consumer Affairs Victoria puts the threshold plainly: making these rules needs the support of 75% of lot owners, or 75% of lot entitlements where the decision goes to a ballot or poll, and the power has been available since 1 January 2025.

Do check the registered rules for any building you're considering, and ask the owners corporation manager whether a resolution has been floated. A building that resents its short-stay lots now has a cheap, legal way to be rid of them, and it didn't two years ago.

Geography makes this sharper in Melbourne than almost anywhere else in Australia. In the council's own August 2023 media release, 4,100 residential properties in the City of Melbourne were being used for short stays, roughly 14% of the municipality's residential stock, with 84% of them in the CBD, Southbank, Docklands and Carlton.

Those four neighbourhoods are high-rise. High-rise means an owners corporation with hundreds of lots, a paid manager and a standing agenda. A freestanding house in Kensington or North Melbourne carries none of that risk, which is an underrated point in favour of the older housing stock at the edges of the municipality.

The same release is worth reading for how the existing operators behave: 46% of those properties were rented out for 90 days or more, and 25% for 180 days or more.

So most Melbourne short-stay listings aren't full-time businesses. They're occasional, which matters for the levy and matters even more for the night-cap proposals that keep resurfacing.

As for what a typical property earns, the Victorian Parliamentary Budget Office worked it out from the government's own data: average annual booking revenue of $27,778 per short stay property in Victoria, producing an average levy bill of $2,083. Melbourne's CBD and Southbank stock skews above that average on nightly rate and below it on occupancy, so treat the state figure as a floor rather than a forecast for your own unit.

Short-Term Rental Licensing Requirement in Melbourne

Assuming your building's rules let you through and those numbers still work, the next question is what you have to apply for. For most Melbourne hosts, the honest answer is nothing at all.

There's no short-term rental licence in Victoria. The only registration in the whole system is a State Revenue Office levy registration, and the SRO is explicit that booking platforms and owners or tenants who take direct bookings are the ones who need it.

List exclusively on Airbnb, Vrbo or Booking.com and the platform is the person liable under section 12 of the Act, so you register nothing, lodge nothing and remit nothing. Take one booking directly, by email or through your own website, and you've stepped over the line into being a registered short stay levy payer yourself.

Once you're on that side of the line, the mechanics are still short. You must apply to the Commissioner before the end of the first return period in which you're liable. Your return period is a full year unless your relevant booking fees hit $75,000 or more in the previous year, in which case it becomes quarterly.

Then you lodge and pay within 30 days of the end of each period, which the SRO publishes as 30 April, 30 July, 30 October and 30 January for quarterly filers, and 30 January for annual filers. A registered payer has to lodge even in a period where no levy is owed.

That 30 January date is the one to diarise, because 2026 was the first year it ever fell due. Everyone who took direct bookings during 2025 and stayed under $75,000 had to register and file a first annual return by 30 January 2026.

There's one more piece of paper worth knowing about. Section 21 of the Act requires an owner or renter to give the booking platform a declaration where the premises aren't short stay accommodation, which is how you tell Airbnb that the place is your principal residence and shouldn't be levied.

The platform then has to keep that declaration for at least five years. And if the Commissioner later decides the premises were short stay accommodation after all, you and the platform become jointly and severally liable for the unpaid levy plus interest and penalty tax. Airbnb handles this through its own short stay levy declaration form rather than an SRO form, and says it processes them within seven days.

Melbourne's zero-fee position isn't a Victorian universal, mind you. Bass Coast Shire, two hours down the highway, registers every short-stay property under its Local Law No. 1 and charges $600 a year for one to four bedrooms and $900 for five or more in 2026/27, non-transferable and non-refundable.

Victorian councils kept that power. The City of Melbourne chose not to use it, and a future council could change its mind.

Required Documents for Melbourne Short-Term Rentals

Until one does, there's no application to lodge in the City of Melbourne, though there's still paperwork worth keeping. Most of it exists so you can answer a question later rather than so you can start.

• The registered rules of your owners corporation, plus written confirmation of whether a short-stay prohibition rule has been proposed. Ask the manager in writing so you have a dated answer.
• Your levy registration details, if you take direct bookings. The State Revenue Office asks for your SRO customer number if you have one, date of birth, contact details, an ABN if you have one, the date your first booking ended after 1 January 2025, and your total short stay booking fees for 2024.
• A booking log covering every stay. Each return needs the property address, the booking start date, the booking end date and the total booking fee, and bookings count in the period when the stay ends rather than when it was made.
• The section 21 declaration, where you've claimed your place isn't short stay accommodation at all. Keep your own copy even though the platform is the one required to retain it for five years.
• Income and expense records for the ATO, including the purchase, sale and holding costs that feed your capital gains position when you sell.

Insurance is where Melbourne hosts most often assume a rule exists that doesn't. Nothing in Victorian law makes you carry short-stay insurance, and I couldn't find any council or state requirement to hold a policy of any kind.

What your building does carry is the owners corporation's own cover, and section 60 of the Owners Corporations Act sets its minimum public liability limit at $20,000,000. Keep in mind that this insures the owners corporation for occurrences connected with common property. It isn't cover for your lot, your contents, or a guest who hurts themselves inside your apartment.

So read your own policy's wording on short-term letting before your first booking. Plenty of standard landlord policies exclude it outright.

Melbourne Short-Term Rental Taxes

Insurance you can choose to skip. Tax you can't, and there are more layers of it than the single 7.5% headline suggests, though a couple of them will come to nothing for most hosts.

Charge	Rate	Who hands it over
Victorian short stay levy	7.5% of the total booking fee	The platform on platform bookings, you on direct bookings
GST on the accommodation	Nil on residential rent	Nobody
Income tax on the profit	Your marginal rate	You, through your annual return
Victorian land tax	Nil below $50,000 of taxable land value, then $500 and up	You, on an SRO assessment
Vacant residential land tax	1%, 2% or 3% of capital improved value	You, on an SRO assessment

The levy first, since it's the one every guest sees. Section 13 of the Short Stay Levy Act sets the rate at 7.5% of the total booking fee, rounded down to the nearest five cents. Section 7 then defines that fee to include the GST and the levy itself, which is why Vrbo tells Australian hosts it calculates the charge at 8.11% to arrive at a true 7.5%.

Cleaning fees and late checkout fees are in. Payment processing charges and separately billed damage are out.

Both major platforms already handle it. Airbnb has collected and remitted the levy on Victorian bookings since 1 January 2025 and states plainly that hosts need to make no changes at their end, while Vrbo does the same for bookings made on or after that date.

The levy is added to what the guest pays, so your payout is untouched. That's the whole reason Victoria structured it as a platform liability rather than a host obligation.

GST is the layer that surprises people, in a good way. The ATO's guidance on renting out all or part of your home says you don't pay GST on residential rent, and that you only need to think about GST if you're running an enterprise of commercial residential premises such as a boarding house. A furnished Southbank apartment on Airbnb isn't that.

Your income tax position is ordinary, though. Declare the income, apportion deductions where you use part of the property yourself, and carry the capital gains consequences when you eventually sell, because letting out a former main residence chips away at the main residence exemption.

Don't assume the ATO is working from your honesty either. Under the Sharing Economy Reporting Regime, platforms have reported short-term accommodation income since 1 July 2023, twice a year, by 31 January and 31 July. Your Airbnb earnings reach the ATO before your return does.

Land tax deserves its own paragraph, since it's the quiet cost that turns a marginal Melbourne investment negative. A property you let short-term isn't your principal place of residence, so the exemption that shelters most Victorian homes doesn't apply. Victorian land tax starts at $500 once your total taxable Victorian landholdings pass $50,000, reaches $975 at $100,000, and climbs from there.

Apartment owners often escape lightly, because a strata lot's share of site value is small. Owners of a whole house in Carlton or North Melbourne rarely do.

Then there's vacant residential land tax, which since 2025 applies across the whole state rather than just inner Melbourne, and which now escalates: 1% of capital improved value in the first year, 2% in the second consecutive year and 3% in the third and beyond.

Short-term letting is your defence here, because land isn't vacant if it was lived in for six months of the previous year under a genuine lease or short-term letting arrangement. Given that 54% of Melbourne's short-stay properties were booked under 90 days a year, a lightly used holiday flat can fail that test and pick up a 1% bill on its full improved value.

The notification date moved this year too, so don't forget that owners had until 15 February 2026 to tell the SRO about land vacant during 2025, a month later than the old 15 January deadline.

Australia Wide Short-Term Rental Rules

That vacancy tax is a Victorian invention. Cross a state border and almost every rule above changes, because Australia has no national short-term rental law at all, and the Commonwealth touches this sector in exactly one place.

That place is the ATO. The Sharing Economy Reporting Regime is federal and applies to every platform operating in Australia, so a host in Perth and a host in Docklands are equally visible. GST treatment of residential rent is federal too. Everything else, the levies, the registers, the caps and the strata powers, belongs to the states, and they've gone in genuinely different directions.

New South Wales chose registration and caps rather than a tax. Its planning department requires every short-term rental dwelling to be listed on the STRA Register on the NSW Planning Portal, to meet a fire safety standard, and to comply with a mandatory Code of Conduct. It also caps non-hosted stays at 180 days a year across the Greater Sydney region, dropping to 60 days in Byron Shire from 23 September 2024.

Nothing in Victoria resembles any of that.

Queensland went the other way and then reversed. Brisbane City Council consulted on a Short Stay Accommodation Local Law through 2023 and 2024, then published a notice that it is not proceeding with the proposed local law at this time, on the reasoning that platform growth had slowed and management had improved. Two of the country's biggest councils, Melbourne and Brisbane, looked hard at their own permit schemes and both walked away.

Which leaves Victoria as the state that taxes rather than licenses. There's no register to join, no cap on nights, and no code of conduct. There's a levy that a platform pays for you, and a strata vote that can end it.

Does Melbourne Strictly Enforce STR Rules?

Set against Sydney's register, Victoria looks loose on paper. In practice, enforcement arrives from three directions at once, and none of them involves a council inspector knocking on your door.

The first is the State Revenue Office, and it enforces the way a revenue office does. The levy sits under the Taxation Administration Act 1997, so missing a return is a tax default rather than a licensing breach.

Penalty tax runs at 25% of the shortfall where you failed to take reasonable care, rising to 75% for intentional disregard of the law, and it climbs again to 30% or 90% where you concealed or hindered. Tell them before an investigation starts and those drop to 5% and 15%. Interest is charged on top at 12.43% a year, as of July 2026, being the 4.43% market rate plus an 8% premium.

That's not a fine you absorb once. It compounds, and that's where an unregistered direct-booking operator gets badly hurt.

What makes the levy hard to dodge is that the data already exists. Platforms are the liable party, they remit automatically, and the ATO receives their income reports twice a year regardless. So an unremitted levy in Victoria almost always means somebody was taking direct bookings and staying quiet about it, which is exactly the pattern a data match surfaces.

The second direction is the Victorian Civil and Administrative Tribunal, and this is the one that ends businesses. Part 11 Division 1A of the Owners Corporations Act lets an owners corporation, a lot owner or an affected occupier apply over a short-stay guest's conduct.

The tribunal can make a prohibition order banning short-stay use of the lot for a specified period, once breach notices have been served on the provider on three separate occasions within 24 months. Selling the apartment doesn't lift that order if the buyer is an associate.

It can also award up to $2,000 in loss of amenity compensation to each affected occupier for each breach, on an application made within 60 days, and impose a civil penalty of up to $1,100 on the guest.

Then section 169H makes you and your guest jointly and severally liable for those amounts, with one escape: you aren't liable for the amenity compensation if the tribunal accepts you took all reasonable steps to prevent the breach. Watch out for the three-strikes count in particular, since a neighbour with a diary is all it takes to start it.

The third direction is the municipal building surveyor, and Melbourne is where that power got tested. In Genco and City of Melbourne v Salter, decided in December 2013, the council's own building surveyor ordered three apartments at Waterview Walk in Docklands to comply with Class 3 requirements, which is the hotel classification. The Court of Appeal granted leave and then dismissed the appeal, holding that "dwelling" in Class 2 isn't limited to long-term occupation.

The qualification is the part to remember, though. Nettle JA said Class 3 may well be right where apartments are "of such a number and so physically disposed in relation to each other as to resemble the residential part of an hotel", with hotel-style services attached. One or two scattered through a large building, on the other hand, would be very difficult to see that way.

So a single unit is safe on that authority. A whole floor of them with a reception desk is not.

How to Start a Short-Term Rental Business in Melbourne

Given how much of the risk sits in your building rather than in any application form, the order below matters more than it might look. The early steps are the cheap ones, and they're the ones that tell you whether the rest is worth doing.

1. Read the owners corporation's registered rules before you buy or list. A prohibition rule under Schedule 1 is the only thing here that can stop you outright, and it needs 75% support rather than unanimity.
2. Ask the manager whether a short-stay resolution has been raised, and get the answer in writing. A building that has discussed it once will discuss it again.
3. Work out whether the place is your principal place of residence. If it is, no owners corporation rule can prohibit your listing and no levy applies to the stay, so submit the section 21 declaration to your platform.
4. Decide whether you'll ever take a direct booking. Platform-only means no SRO registration at all. One direct booking changes that, and the registration deadline is the end of your first liable return period.
5. Check your address for overlays and permit conditions with the City of Melbourne planning team, since heritage and site-specific controls are property-by-property rather than short-stay rules.
6. Set up the booking log on day one: property address, booking start date, booking end date and total booking fee for every stay, recorded against the period the stay ends in.
7. Sort insurance before your first guest, and confirm in writing that your policy covers short-term letting. The owners corporation's $20 million public liability cover applies to common property, not to your lot.
8. Diarise 30 January and, if you own vacant residential land, 15 February. Those are the levy return and the vacancy notification dates, and both attract penalty tax when missed.
9. Model the property after the levy, not before it. Guests pay the 7.5%, which means it lands on your nightly rate's competitiveness rather than on your payout, and that shows up as occupancy.

Who to Contact in Melbourne about Short-Term Rental Regulations and Zoning?

Whichever of those steps you get stuck on, four organisations handle almost everything between them, and knowing which one owns your question saves a great deal of time on hold.

The council, for zoning, overlays and local laws

The City of Melbourne issues no short-stay permit, so contact it about planning overlays, property-specific permit conditions, noise and waste, or the status of the shelved short-stay policy.

• Phone: +61 3 9658 9658, 7.30am to 6pm Monday to Friday, public holidays excluded
• In person: Customer Service Centre, Melbourne Town Hall, 120 Swanston Street, Melbourne, 8.30am to 5pm Monday to Friday
• Postal: GPO Box 1603, Melbourne VIC 3001
• Short-stay policy feedback: [email protected], the mailbox published on the council's own Short-Term Accommodation Policy page

The State Revenue Office, for the levy and land tax

The State Revenue Office Victoria administers the short stay levy, land tax and vacant residential land tax, including registration, returns and objections.

• Phone: 13 21 61, or +61 3 9628 0000 from outside Australia, 8.30am to 5pm Monday to Friday
• Postal: State Revenue Office, GPO Box 1641, Melbourne VIC 3001
• Online: registration and returns run through the levy portal linked from the short stay levy page
• Note: the SRO states on its contact page that it can't offer in-person or walk-in support, so don't plan a visit

Consumer Affairs Victoria, for owners corporation rules

Consumer Affairs Victoria is the regulator for owners corporations, which makes it the place to ask how a prohibition rule gets made, challenged or enforced, and it conciliates disputes that a building's own grievance procedure can't settle.

• Phone: 1300 55 81 81, 9am to 5pm Monday to Friday
• Postal: GPO Box 123, Melbourne VIC 3001
• Online: enquiry and complaint forms sit on the Consumer Affairs Victoria contact page

VCAT, for short-stay disputes

The Victorian Civil and Administrative Tribunal hears short-stay accommodation disputes under Part 11 Division 1A, which covers prohibition orders, loss of amenity compensation and civil penalties.

• Phone: 1300 018 228, 9am to 4.30pm Monday to Friday
• Email: [email protected]
• Postal: GPO Box 5408, Melbourne VIC 3001
• Case type: the owners corporations list handles these applications

What Do Airbnb Hosts in Melbourne on Reddit and Bigger Pockets Think about Local Regulations?

Those tribunal powers colour how Melbourne operators talk about the last two years. What follows is my read of the recurring themes in public discussion rather than any kind of survey, so weigh it accordingly, and note that every hard number in it is tied to a source above.

• The levy landed softer than the industry warned. Because the platforms remit it and the guest pays it, most hosts describe it as a pricing problem rather than a compliance one. The Parliamentary Budget Office's own estimate of $2,083 a year on average booking revenue of $27,778 is roughly what a fortnight of vacancy costs, which is how a lot of operators seem to have filed it mentally.
• The owners corporation vote is the fear, and it's concentrated. Discussion clusters hard around Southbank, Docklands and the CBD towers, which is unsurprising given 84% of the municipality's short-stay stock sits there. Investors who bought a unit specifically to let it nightly are the exposed ones, because the principal place of residence carve-out does nothing for them.
• The 28-day line has pushed people toward mid-term. Corporate, relocation and medical-stay bookings of 28 nights or more fall outside the levy entirely, and Melbourne has the hospital and university demand to fill them. It's a lower nightly rate for a cleaner regulatory position, and the trade is being made deliberately rather than reluctantly.
• Night caps remain the live worry. The Victorian Greens proposed a 90-day cap rather than a levy, and the Parliamentary Budget Office costed it, finding that 40% of metropolitan Melbourne short-stay properties run more than 90 nights against 32% in regional Victoria. It isn't law and I'd caution against planning around a proposal. But it's the policy most likely to hurt a full-time Melbourne operator, and it hasn't gone away.
• Nobody argues the levy can be avoided. That debate ended when the platforms started collecting it in January 2025. What people argue about now is whether the council will eventually revive its own local law, which is a fair question given the project page still says paused rather than closed.

So weigh a Melbourne unit against the numbers rather than the noise. The Melbourne market gives you the nightly rates and occupancy to test against that $2,083 levy estimate, and running a specific address through BNBCalc is a better use of an afternoon than another forum thread.

Frequently Asked Questions

Do you need a licence or permit to run an Airbnb in Melbourne in 2026?

No. The City of Melbourne has no short-term rental licence, permit or registration scheme, and it charges no annual fee. A local law proposing a $350 yearly registration and a 180-day cap was consulted on in September 2023 and never came into force. The only registration in the Victorian system is a State Revenue Office short stay levy registration, and that applies solely to hosts who take bookings directly rather than through a platform like Airbnb or Vrbo.

How much is Victoria's short stay levy and who pays it?

The levy is 7.5% of the total booking fee for any stay of fewer than 28 continuous days, set by section 13 of the Short Stay Levy Act 2024 and in force since 1 January 2025. The booking platform is legally liable when the booking comes through a platform, so Airbnb and Vrbo collect it from the guest and remit it directly. Host payouts are unaffected. On direct bookings, the owner or renter is liable and must register and lodge returns themselves.

Can an owners corporation ban short-term rentals in a Melbourne apartment building?

Yes, since 1 January 2025. Schedule 1 of the Owners Corporations Act 2006 lets an owners corporation make a rule prohibiting the use of lots as short-stay accommodation, passed by special resolution with the support of 75% of lot owners. The one exception is written into the clause: the rule cannot stop an owner, lessee or sub-lessee from letting a lot they occupy as their principal place of residence. Investment units with absent owners have no such protection.

What happens if you don't pay the Victorian short stay levy?

Missing a return is a tax default under the Taxation Administration Act 1997, not a licensing breach. Penalty tax starts at 25% of the shortfall for failing to take reasonable care and rises to 75% for intentional disregard of the law, with further increases to 30% or 90% where the taxpayer concealed or hindered. Interest runs at 12.43% a year from 1 July 2026 to 30 June 2027. Voluntary disclosure before an investigation reduces the penalty to 5% or 15%.

Does a Melbourne short-term rental avoid vacant residential land tax?

Only if it's genuinely used. Land isn't vacant where it was lived in for six months of the previous year under a genuine lease or short-term letting arrangement, so a well-booked property passes the test. A lightly used one fails it, and vacant residential land tax runs at 1% of capital improved value in the first year, 2% in the second consecutive year and 3% thereafter. Owners had to notify the State Revenue Office by 15 February 2026 for land vacant during 2025.

Last verified: July 2026. Every ordinance, tax rate, state law, and contact detail in this guide links to or comes from its official source.