REGULATORY GUIDE

Stay fully compliant with Melbourne's short-term rental regulations. Everything you need to know about permits, taxes, and legal requirements.
Last updated:
September 2, 2025
Australia
Victoria
Melbourne
REGULATORY GUIDE

Stay fully compliant with Melbourne's short-term rental regulations. Everything you need to know about permits, taxes, and legal requirements.
Last updated:
September 2, 2025
Australia
Victoria
Melbourne

TL;DR

Rules

How to comply

Rules, Taxes & Penalties

Upcoming Changes

FAQs

ATO: Rental income you must declare

State/council based definitions. Example: NSW STRA allows non-hosted entire homes with caps in some areas; other states differ. Check local planning rules.

Short-term lets are legal in Melbourne and generally assessed under the Melbourne Planning Scheme. There’s no citywide night cap or city STR register. Many domestic-scale short stays operate in existing dwellings without a new planning permit, but a permit can be required where a different accommodation use is proposed or permit/overlay conditions apply—check your zone and building’s approvals. From 1 Jan 2025, Victoria applies a 7.5% Short-stay Levy to paid stays under 28 nights. Declare income to the ATO; GST usually doesn’t apply to ordinary residential rent unless treated as commercial residential premises. Fit and maintain smoke alarms to Victorian requirements.

Legality
Short lets are allowed in Melbourne; planning is case-by-case under the Melbourne Planning Scheme. A permit may be required if the use shifts to a commercial accommodation use or triggers scheme/permit conditions.
Night Cap
None locally; Victoria has no statewide night cap.
STR Register
No city STR register. Check your property’s zone/overlays and any existing permit conditions. Apply for a planning permit if advised by Council.
Risk
Operating in breach of the planning scheme or your building’s rules—or ignoring the Short-stay Levy/smoke-alarm duties—can trigger council or owners-corporation enforcement.

Key Rules at a Glance

Overview of requirements, authorities, and costs for short-term rental compliance
Requirement
What you need
Authority / Link
Cost / Time

Registration / Permit

No city STR register. Check your property’s zone/overlays and any existing permit conditions. Apply for a planning permit if advised by Council.

Max Nights

None locally; Victoria has no statewide night cap.

Planning / Zoning

Allow about 60 statutory days for a planning decision (clock stops can extend timelines).

Fee
A$
Around 60 statutory days for typical applications; longer if referrals/advertising apply.

Safety & Insurance

Install/maintain AS 3786-compliant smoke alarms on every level; rental providers must ensure working alarms. Fire services recommend interconnected photoelectric alarms in bedrooms, hallways and living areas; test and keep records.

Tax

Declare profits to ATO. GST generally doesn’t apply to residential rent. 7.5% Short-stay Levy on stays under 28 nights from 1 Jan 2025 (levy based on total booking fees; platforms usually pay/submit).

Step-by-Step: How to comply

Overview of requirements, authorities, and costs for short-term rental compliance
1

Use of a dwelling for short stays is assessed under the Melbourne Planning Scheme. A planning permit may be required where a different accommodation use (e.g., serviced apartment) is proposed or where overlays/permit conditions trigger assessment—confirm with Council. Allow about 60 statutory days for a planning decision (clock stops can extend timelines).

2

Apply if required. Planning application (fee ~A$).

3

Declare profits to ATO. GST generally doesn’t apply to residential rent. 7.5% Short-stay Levy on stays under 28 nights from 1 Jan 2025 (levy based on total booking fees; platforms usually pay/submit).

4

Install/maintain AS 3786-compliant smoke alarms on every level; rental providers must ensure working alarms. Fire services recommend interconnected photoelectric alarms in bedrooms, hallways and living areas; test and keep records.

Your Short-Term Rental Compliance Guide

Overview of requirements, authorities, and costs for short-term rental compliance

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  • Income tax: include short-stay income in your ATO return.
  • GST: residential rent is input-taxed (no GST), unless you’re supplying accommodation as “commercial residential premises”.
  • Short-stay Levy: 7.5% of total booking fees (includes cleaning fees and GST where applicable), applies to stays under 28 consecutive days; principal place of residence stays are excluded; hotels/motels are excluded; platforms lodge/pay where the booking is via the platform.
  • SRO Victoria: Short-stay levy (7.5%)

    Edge Cases & Exemptions

  • Owners corporations can make rules to ban short stays (from 1 Jan 2025); by-laws may already restrict STR.
  • Some buildings have permit conditions prohibiting short-stay use—check your property’s existing permit.
  • Short-stay Levy applies to the total booking fee (includes cleaning and GST where applicable).
  • Apartments: nuisance rules apply—VCAT can issue orders/penalties for unruly short-stay behaviour.
  • Penalties & Enforcement

  • Strata/OC: VCAT can impose orders/penalties for nuisance; OCs can now ban short stays by rule.
  • Planning: breaches can lead to enforcement notices and prosecution under the Planning and Environment Act.
  • Safety: rental providers are responsible for working smoke alarms in residential properties.
  • Planning breaches can lead to enforcement notices and prosecution under Victorian planning law. Owners corporations can take action for short-stay nuisance and, from 1 Jan 2025, may ban short stays by by-law. Smoke-alarm non-compliance attracts penalties for rental providers.

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    ATO: Rental income you must declare

    State/council based definitions. Example: NSW STRA allows non-hosted entire homes with caps in some areas; other states differ. Check local planning rules.

    Do I need planning permission in Melbourne?
    Is there a night cap or 90-day limit in Melbourne?
    Do I need to register or get a permit?
    What taxes do I need to pay for short-term lets?
    What safety requirements do short-term lets need to meet in Melbourne?

    Tools & Resources

    Planning Guidance
    City of Melbourne – Planning & Building
    Fire Safety Guidance
    Fire Rescue Victoria — Smoke alarms
    Tourist/Local Tax Guidance
    SRO Victoria: Short-stay levy (7.5%)
    National Safety Guidance
    AFAC: Basic Home Fire Safety (national)
    National Tax Guidance
    ATO: Rental income you must declare
    Regional Safety Guidance
    Fire Rescue Victoria: Home fire safety

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    This guide is informational and not legal advice. Always confirm with

    City of Melbourne – Planning & Building

    your local authority.