Is Airbnb legal in Melbourne?

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Yes—“Airbnb-style” letting is generally treated as short-stay/short-term accommodation in Victoria. Regulation is shared:

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• The State sets taxes (the Short-Stay Levy) and rental safety obligations.
• Owners corporations (OCs) can regulate buildings via rules (including banning short-stays from 1 Jan 2025).
• City of Melbourne explored local controls, but isn’t progressing a local law at this time.

2025: the 7.5% Short-Stay Levy (scope, payer, exemptions)

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• When & where: Applies from 1 January 2025 to short-stays under 28 consecutive days in Victoria.
• Rate & base: 7.5% of the total booking fees (includes cleaning fees and GST, excludes credit-card fees).
• Who pays: If the booking is via a platform, the platform pays/remits; direct bookings are paid by the owner or tenant.
• Exemptions: PPR (principal place of residence) stays are exempt; hotels/motels and similar are excluded.
• Transitional: Only bookings made and completed on/after 1 Jan 2025 attract the levy; bookings made before that date are out.

Can my building ban short-stays?

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Yes, potentially. From 1 January 2025, an OC can ban short-stay use of lots by making an OC rule with a special resolution (75% support). However, the rule cannot apply to a lot that is the owner or occupier’s PPR — they can still short-let rooms or while away temporarily. Check your building’s current OC rules and any recent meeting minutes.

Does Melbourne City require a permit, registration or a night-cap?

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• Status: Following consultation, the Future Melbourne Committee resolved to not progress a short-stay local law at this time, noting the statewide levy. The consultation page also states City policy work is paused pending levy details. Result: no city-wide cap or registration currently in force. Recheck Council updates before you list.‍
• Other councils differ: Some Victorian councils do require registration/permits (e.g., Mornington Peninsula registration; Wyndham permit) — these don’t apply inside the City of Melbourne, but matter if your property is in those LGAs.‍

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Fire & rental safety in Victoria: smoke alarms

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For all rentals in Victoria, the rental provider must ensure smoke alarms are installed and working and are checked at least annually. Alarms must meet AS 3786. Fire Rescue Victoria advises alarms on every level and recommends interconnected alarms (best practice). Keep written records of annual testing and any maintenance.

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Taxes & reporting: beyond the levy

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The Short-Stay Levy is separate from income tax. You must declare your short-stay income. Also, under the Sharing Economy Reporting Regime (SERR), accommodation platforms report host transactions to the ATO on a biannual schedule—expect prefill/matching.

How to stay compliant (step-by-step)

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1. Check your building rules. If you’re in an apartment, confirm whether your OC has adopted a ban (needs 75% special resolution) and note the PPR exemption.
2. Confirm council status. For properties inside the City of Melbourne, Council isn’t progressing a short-stay local law at this time; no cap/registration is in force. Monitor the consultation page for changes.
3. Factor in the levy. For stays <28 nights, apply the 7.5% levy logic; know who remits (platform vs you) and note PPR/hotel exclusions and transitional rules.
4. Meet safety duties. Arrange annual smoke-alarm checks (AS 3786), keep records, and follow FRV placement guidance (every level; interconnection recommended).
5. Set house rules & comms. Quiet hours, waste, elevator/common-area etiquette, and emergency info reduce complaints.
6. Keep clean records. Income/expenses, levy on statements, and documents supporting PPR status when relevant.
7. Prefer done-for-you? Our local team handles setup, compliance and operations: Airbnb Management in Melbourne.
8. Bookmark updates: Our live Airbnb-Rules — Melbourne.

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FAQs

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Is there a 90-night cap in the City of Melbourne?
No city-wide cap or registration is currently in force. Council chose not to progress a local law at this time, and policy work is paused pending the state levy. Always recheck Council updates.

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What exactly is the 7.5% levy—and who pays it?
It’s 7.5% of the total booking fees for stays under 28 nights. Platforms pay when booked via a platform; otherwise the owner/tenant pays. PPR stays are exempt; hotels/motels and similar are excluded.

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Do OC bans apply to my own residence (PPR)?
No. OC rules cannot apply the ban to a lot that’s the owner/occupier’s PPR. They can still adopt rules for other lots, subject to the 75% special resolution.

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What smoke-alarm rules apply to rentals?
Rental providers must ensure compliant alarms are installed, working and checked annually (AS 3786). FRV recommends interconnected alarms and alarms on every level.

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Do platforms report my earnings to the ATO?
Yes. Under SERR, accommodation platforms report host transactions on a biannual basis; ensure your income is declared.

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Not Advice: This guide highlights key points for short-term letting and is not legal or tax advice. Rules change — always check the relevant authority’s website for your property and seek professional advice if unsure.