1. Is Airbnb legal in Melbourne?

Yes. Short-term letting is legal in Melbourne and across Victoria. There is no statewide ban or mandatory registration scheme. However, two significant rules took effect from January 2025:

• 7.5% short stay levy on all bookings under 28 nights. Platforms (Airbnb, Booking.com, Stayz) collect this from guests automatically.
• Owners corporation ban powers. OCs can vote (75% special resolution) to ban short-term letting in strata buildings. The ban cannot apply to your principal place of residence.

Safety requirements include gas checks every 2 years, electrical checks every 2 years, and smoke alarms on every storey. For the full regulatory breakdown, see our guide to Melbourne short-term rental rules.

2. How much can you earn?

Earnings depend on location, property type, occupancy, and management quality. Here are benchmarks for professionally managed properties in Melbourne:

• CBD 1-bed apartment: A$40,000-55,000 per year.
• Inner suburb 2-bed: A$50,000-65,000 per year.
• Market median (all types): A$57,911 per year.
• Top 10% performers: A$67,000+ per year, A$408+/night ADR.

Self-managed properties typically earn 30-40% less due to suboptimal pricing and lower occupancy. The median occupancy for professionally managed Melbourne properties is around 68-69%.

2.1 Best suburbs

Tier 1 (highest demand): Southbank, Melbourne CBD, Docklands, St Kilda.

Tier 2 (strong performers): South Yarra, Fitzroy, Richmond, Carlton.

Tier 3 (event hotspots): Albert Park (F1 Grand Prix), Flemington (Melbourne Cup).

For more on how to choose a manager in Melbourne, see our guide to Melbourne Airbnb management companies.

3. Getting started

3.1 Check your building rules

If you are in a strata building, check whether your owners corporation has passed (or is considering) a ban on short-term letting. Review the minutes of the last two AGMs and ask the OC manager directly.

3.2 Safety compliance

Before your first guest, you need: gas safety check (every 2 years), electrical safety check (every 2 years), smoke alarms on every storey, and pool safety certificate if applicable.

3.3 Insurance

Standard home insurance does not cover short-term rental use. You need specialist STR insurance with public liability cover. Major Australian providers include ShareCover, Terri Scheer, and EBM RentCover.

3.4 Tax

All Airbnb income must be declared to the ATO. The 7.5% levy is collected from guests by platforms and does not reduce your payout, but it increases the guest's total cost. For tax details, see our guide to rental income tax in Australia. For platform fee breakdowns, see our guide to Airbnb hosting fees in Australia.

3.5 Professional management

Melbourne's volatile demand curve (sharp spikes during Australian Open, F1, Melbourne Cup; deep winter troughs) makes dynamic pricing and professional management particularly valuable. For costs, see our guide to costs of running a holiday let.