For a decade the holiday let playbook was simple. Buy a unit near the beach, list it on Airbnb or Stayz, and let travellers cover the mortgage. In 2026 that playbook runs into a 7.5% tax in Victoria, a 180-day cap in Sydney, a register in Perth and a permit crackdown in Hobart.
Short stays are not finished, but short-stay rules now decide the returns, and every state wrote its own rulebook. Here is where each state stands in August 2026, and what the returns actually look like once the levy and running costs come out. The crackdown is also shaking loose some interesting buying.
Why governments came after the holiday let
The driver is the rental market. Cotality's (formerly CoreLogic) Rental Review for the June quarter of 2026 puts national rents up 5.9% over the year, the median rent at $705 a week and vacancy at 1.6%. When a city cannot house its nurses and teachers, whole homes in the holiday pool look like a policy failure. The same squeeze drives the tax breaks behind the build-to-rent boom.
Cotality's July 2026 Home Value Index recorded a 0.7% national fall, the largest monthly drop since December 2022, with Sydney down 1.4% and Melbourne down 1.2%. Softer prices plus tight rentals change the sums for anyone weighing whether to hold, convert or sell.
The short version first.
| State | State levy | Day cap for whole-home lets | Registration or permit |
|---|---|---|---|
| Victoria | 7.5% of booking fees | None statewide | SRO levy registration for direct bookings; owners corporations can ban short stays |
| NSW | None | 180 days in Greater Sydney and some regions, 60 days in most of Byron Shire | State register: $65, then $25 a year |
| Queensland | None | None statewide | None statewide; council rates and local laws vary |
| WA | None | 90 nights unhosted in Perth metro before development approval is needed | Mandatory state register: $250, then $100 a year |
| Tasmania | None | None statewide | Planning permit unless you are sharing your own home |
Victoria: the 7.5% levy that set the template
Victoria moved first and hardest. Since 1 January 2025, the short-stay levy has applied at 7.5% of the total booking fee for any stay of less than 28 consecutive days, under the Short Stay Levy Act 2024.
What the levy is charged on
The Victorian State Revenue Office defines the base broadly: the total booking fee takes in the nightly rate, cleaning fees, GST and any late checkout charge, but not credit card surcharges or damage payments. Book through a platform and the platform is liable. It collects and remits the levy, so guests see it added at checkout. Take direct bookings and the obligation is yours, so register with the SRO and lodge returns, annually by 30 January for most hosts, quarterly once booking fees reach $75,000 a year.
Your principal place of residence is exempt, whether you rent a spare room while living there or the whole home while you travel, and commercial accommodation such as hotels and motels sits outside the levy entirely. Revenue goes to Homes Victoria for social and affordable housing, with 25% directed to regional Victoria.
Owners corporations can vote short stays out
The same Act handed apartment buildings a weapon. Since 1 January 2025, a Victorian owners corporation can ban short stays through a 75% special resolution, as Consumer Affairs Victoria sets out. The ban cannot touch lots that are someone's principal home, but an investor lot can lose its short-stay use through a vote the owner does not control. If an apartment's yield case depends on Airbnb, the building's rules and recent minutes are now part of due diligence.
NSW: a register, a code and the 180-day cap
NSW built its framework earlier and has largely left it alone. Every short-term rental must sit on the state STRA register ($65 to register, then $25 a year), display its property ID on listings, meet fire safety standards including interconnected smoke alarms and an evacuation plan, and operate under a mandatory code of conduct.
Hosted properties, where you live on the premises during the stay, face no day limit anywhere in the state; that covers a spare room, and a granny flat you let out while living in the main house. Non-hosted properties are capped at 180 days a year in Greater Sydney, Ballina, parts of Clarence Valley and Muswellbrook, while most other regional areas are uncapped. Bookings of 21 consecutive days or more do not count towards the cap, and since September 2024 most of Byron Shire has run a 60-day cap, with two mapped precincts around Byron Bay town centre and Brunswick Heads still allowed 365 days.
A government review drew more than 430 submissions in 2024, and despite calls to match Victoria's levy, nothing has been legislated as of August 2026, so the 180-day settings stand. Strata buildings hold their own power. Under section 137A of the Strata Schemes Management Act 2015, a special resolution by-law can ban short stays in lots that are not the owner's principal place of residence.
Queensland: no levy, but the council can still reach you
Queensland has no state levy, no state register and no statewide cap. Regulation happens council by council, and the sharpest tool is rates. Brisbane City Council has charged a transitory accommodation rating category since July 2022 for properties listed as short stays for more than 60 days a year, set roughly 50% above the equivalent residential bill.
Brisbane came close to going further. A proposed local law would have required a permit for every short-stay property from 1 July 2026, but on 12 May 2026 the Lord Mayor confirmed the scheme is "not proceeding at this time", citing federal tax uncertainty and pressure on the housing market. Treat that as a pause rather than a full stop, and the 2026 budget's negative gearing and CGT changes as part of the same shifting ground. Other tourist councils run their own rates differentials and local laws, so check the council before contracts.
Western Australia: no registration, no bookings
WA went the data route. Under the Short-Term Rental Accommodation Act 2024, every short-stay property, hosted or unhosted, must be on the state STRA Register. The register opened in July 2024 and became mandatory on 1 January 2025. An unregistered property cannot legally advertise or take bookings, and penalties apply. Registration costs $250 up front and $100 a year to renew.
Planning approval runs separately. Hosted short stays are exempt statewide. Unhosted properties in the Perth metropolitan area can trade up to 90 nights in a 12-month period without development approval; beyond that the owner needs council sign-off, and outside the metro area each council sets its own threshold. WA has also shown its preference openly. A state scheme paid owners $10,000 to move short stays onto long-term leases until its funding was fully allocated.
Tasmania: permits, and Hobart tightens hardest
Tasmania runs short stays through the planning system. Letting your own home while you are away, or up to four bedrooms while you live there, is exempt. Anything beyond that generally needs a planning permit from the local council.
Hobart is where the pressure is highest. Pulse Tasmania's June 2026 reporting on the decision put entire Hobart homes used as short stays at about 840, or 8.8% of the city's private rental market, roughly four times Sydney's rate and almost double Melbourne's. On 10 June 2026, Hobart's planning authority endorsed a draft amendment to stop new whole-home conversions in its Inner, General and Low Density Residential zones, leaving hosted stays and existing lawful operators untouched. The amendment still has to survive public exhibition and the Tasmanian Planning Commission. From 1 July 2026 the council also lifted its discretionary change-of-use application fee from $435 to $5,000.
The investor maths: short stay versus long lease after the levy
Gross short-stay income always looks better than rent. The honest comparison happens after costs, and in Victoria after the levy. Platforms add the 7.5% to the guest's bill, but in a soft market hosts absorb much of it through lower nightly rates, so it belongs in the owner's column.
The table is illustrative only, not market data: a hypothetical two-bedroom Victorian coastal unit that is nobody's principal residence, on short stays versus a standard lease.
| Line item | Short stay | Long-term lease |
|---|---|---|
| Gross annual income | $47,500 (190 nights at $250) | $27,500 ($550 a week, 50 weeks) |
| Victorian short-stay levy (7.5%) | $3,560 | $0 |
| Management | $9,500 (20%) | $1,925 (7%) |
| Cleaning, linen and consumables | $3,000 | $0 |
| Utilities and internet | $3,000 | $0 (tenant pays) |
| Extra wear and refurnishing | $2,000 | $500 |
| Letting fee | $0 | $1,100 (two weeks' rent) |
| Net before loan, rates and insurance | $26,440 | $23,975 |
Twenty thousand dollars of gross advantage shrinks to about $2,500, and that is with a healthy 190 booked nights. At 150 nights the short stay lands roughly $4,800 behind the lease. Other lines can swing it further. Holiday-area premiums are rising fast enough that we covered the home insurance affordability crisis separately. Council rate loadings like Brisbane's add up quietly, and lenders typically shade short-stay income harder than rent, worth testing with a mortgage broker before you commit. Cotality puts national gross rental yields at 3.7% as of June 2026, so the lease side of the ledger has improved. This is general information, not financial, legal or tax advice, so run your own numbers with a licensed professional.
The buyer angle: ex-Airbnb stock is hitting the market
Every tightening episode shakes properties loose. Byron's 60-day cap, Victoria's levy and owners corporation bans, and Hobart's permit wall push marginal operators to sell or convert, often in coastal and regional towns where values are already drifting. Cotality's July 2026 index has regional NSW down 0.4%, regional Victoria down 0.3% and regional Queensland down 0.3%.
For buyers, that creates a recognisable listing: fully furnished and marketed with a holiday let history. Some are excellent buying, but the rules that pushed the vendor out apply to you from settlement day. Before buying with short-stay plans, check the owners corporation or strata by-laws for a ban, the council's permit and registration requirements, and the realistic day cap for that exact address. If your plan is the opposite, converting an ex-holiday let to a long-term rental, the timing is unusually good: vacancy at 1.6% and rents up 5.9% over the year, on Cotality's June quarter numbers, mean the boring option now pays properly. The same logic suits rentvesting if you would rather own in a holiday town than in the city where you rent.
This is where local knowledge earns its fee. A buyer's agent through GoMatch can tell you which buildings have banned short stays, which streets are saturated with ex-Airbnb stock, and whether a vendor's income claims survive the local rules.
FAQ: short-stay rules in 2026
Does Victoria's short-stay levy apply to my own home?
No. The levy exempts your principal place of residence, so renting a spare room while you live there, or the whole home while you travel, does not attract it. It applies to stays of less than 28 days in properties that are not anyone's principal residence.
Can I still run a short stay 365 days a year in Sydney?
Only if it is hosted, meaning you live on the premises during stays. Non-hosted properties in Greater Sydney are capped at 180 days a year, though bookings of 21 days or more do not count towards the cap. In most of Byron Shire the cap is 60 days.
Which states charge a short-stay levy in 2026?
Victoria is the only state with one, at 7.5% of total booking fees. NSW has not legislated a levy as of August 2026, Queensland leaves it to councils (Brisbane charges short stays higher rates), and WA and Tasmania regulate through registration and permits instead.
Is converting a short stay to a long-term rental worth it?
Often, yes, for marginal operators. Once the levy, management, cleaning and vacancy are counted, a long lease can land within a few thousand dollars of a short stay's net income with far less volatility, and Cotality's June 2026 figures show rents rising 5.9% a year against 1.6% vacancy. Run both scenarios on your actual occupancy before deciding.
Where the short-stay rules leave you
There is no national short-stay policy, just five states solving the same housing squeeze five different ways. For owners, the message is to know your net figure after the rules, not your gross. For buyers, the crackdown is doing part of the negotiating for you, loosening furnished stock in tourist towns just as prices soften.
Rules this fragmented reward buyers who check them one address at a time. Confirm the state settings, the council's position and the building's by-laws before you sign, and treat every figure here as a prompt to verify on the day: levies, caps and fees are still moving.
Sources
- Victorian State Revenue Office, "Understanding the short stay levy", 2026.
- Parliament of Victoria, "Short stay accommodation to be taxed and regulated", 2024.
- Consumer Affairs Victoria, "Making rules to ban short stay accommodation", 2026.
- NSW Department of Planning, short-term rental accommodation policy pages, 2026.
- NSW Government, Strata Schemes Management Act 2015, section 137A.
- Government News, "Council to increase rates for Airbnb properties", 2022.
- Lord Mayor of Brisbane, "Proposed short stay permits not proceeding at this time", May 2026.
- Government of Western Australia, STRA Register registration and fees, 2026.
- WA Department of Planning, Lands and Heritage, STRA planning reforms, 2024.
- Government of Western Australia, Short-Term Rental Accommodation Incentive Scheme, 2024.
- Tasmanian State Planning Office, "Short Stay Accommodation" fact sheet, September 2025.
- Pulse Tasmania, Hobart short-stay amendment and fee reports, 2026.
- Cotality, Home Value Index, "Australia's housing market downturn widens", August 2026.
- Cotality, Rental Review Q2 2026, July 2026.
