Short-term letting in Melbourne: Regulations, benefits, and property management



The Insider @ Houst
Last updated on
May 2, 2023

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Short-term letting in Melbourne: Regulations, benefits, and property management

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Melbourne is a great place to start your vacation rental business because the diversity of this vibrant city never fails to attract many tourists towards it. If you are also seeking to take advantage of the dynamic surrounding of Melbourne, you can begin with the highly profitable business of short-term letting in Melbourne. Most probably, the chances are that you become a millionaire, if not billionaire, by investing in the right kind of property for a letting business.

Let us tell you that if you are really thinking of investing your time, money and energy into this business, you need to learn about the Melbourne regulations about short-term or holiday rental business. Moreover, if you don’t have time to manage your business, Houst is right there to help you in accelerating the growth of your letting business by providing you excellent property management and listing services.

In this blog, we’ll discuss short-term letting along with its benefits, short-term letting regulations in Melbourne and the best hosting management company in Melbourne. So, let’s dive in!

Table of Contents

Short-Term Letting in Melbourne

Traditional hotels have become less popular after the revolution of online platforms i.e., and Airbnb in the world. This is the reason, many tourists who adore travelling and seek an affordable place to live for a few days are finding short-term letting very attractive.

Short-term letting refers to the renting out of furnished apartments, dedicated rooms in a house, or a property. These dedicated spaces are rented out to visitors from a few days to a few months. Melbourne is the top tourist destination and many travellers look for safe and secure residential properties for making their sojourns quite comfortable and economical. 

As discussed above, online platforms for listing the residencies and properties as short-term letting allow many newbies a platform to host guests and earn a handsome amount of money. However, there’s one thing every renter should be aware of is that Melbourne has set some regulations on short-term letting. These strict regulations ensure the guests and landlords are safe and secure and there’s no danger to the interests of each party.

Short-Term Letting Regulations in Melbourne

Interestingly, the City of Melbourne has the highest number of short-term Rentals (STRs) listings and high occupancy rate, the regulations are not as stringent as they should have been. Unlike other cities, there's no need to obtain planning permits from Victoria Planning Provisions. 

Above all, there’s no restriction on the number of nights a host can rent out his space to a single party. Moreover, the zoning requirements are not a hurdle in listing the property on different online booking platforms. 

We know you have many incentives to invest in Melbourne in short- term letting. Being an ideal place to start your rental business, you can kick start a letting or renting business in this vibrant city instantly. That being said, the landlords must also be familiar with the safety regulations set by the City of Melbourne and the Victorian Government.

City of Victoria Bylaws

Victoria state has certain laws and regulations for the short-term rentals in its state. As Melbourne is a part of this state, the renters must get necessary information about the rules and regulations. So, let’s discuss them!

License is Required

A license from the Victoria state is required to jumpstart the listing and operate a renting business in Melbourne. This rule has been clearly specified in the “Short-Term Rental Regulation Bylaw”. 

Principal Residency

The place to be rented out must be the primary residency of the operator or the renter. The fee for primary residency is $500. If it is not the primary residency, then the owner must pay $1500 for getting a license.

For example, you can obtain a business license for short-term rentals if you’re living in your primary residence. In another similar scenario, if you have a residency and you visit this place every week or every month because you are doing a job in another city, you can rent out your place as a holiday rental.

Legal Non-Conforming Buildings

Nonetheless, you won’t be able to get a letting permit if you own a property but don’t live there. On the contrary, the status of primary residence or non-primary residence allows short-term rentals. In the later case, the license will be provided only to those properties having legal non-conforming buildings. 

Legal non-conforming buildings are the ones which have been established before the change in bylaws or the zoning requirements. Acknowledging their investment and time, the authorities didn’t change their business status. Therefore, they can continue their rental business without any further investment.

Self-Contained Dwelling Suite

Self-contained dwelling suite is not allowed for short-term letting under the law of the City of Victoria. In the opposite case where you have a self-contained dwelling and a renter wishes to sublet it, the law allows the subletting of the self-contained accommodation.

Subletting In Melbourne

With the consent of the landlords, a renter is allowed to sublet his space. However, he can rent up to only two rooms in their shared living space. As discussed above, the self-contained dwelling suite can be used to sublet the space also. 

Penalties by City of Vitoria

The City of Victoria ensures the interests of renters and tenants are safe and the regulations provide affordable living experience for the travellers. If they notice any violation of short-term rental bylaws in Victoria, they charge a heavy penalty to the renters. The City of Victoria has set two kinds of penalties for not having a license for short-term rentals.

Penalty for Operating without a License

If a renter is operating a rental business without having a license from the City of Victoria, he will be charged with a fine of $500 per day. This hefty fine reflects the significance of a business license in Victoria and how firm the government is to discourage the business operations without a license.

Penalty for Advertising without a License

If the City of Victoria finds out that a renter is advertising his letting business without a business license, he will be charged with a fine of $250 per day. As the number of days without a license go by, you will pay more penalties ultimately.

Short-Term Rental Laws in Melbourne

Short-term rentals laws in Melbourne differ slightly from the City of Victoria. The differences are as follows:

  1. Melbourne law doesn’t require a planning permit to start operating a rental business.
  2. It also doesn’t set zoning regulations for vacation rentals.
  3. There’s no cap on the number of nights a tenant decides to live as his short stay. 

However, there are some safety and emergency standards to ensure protection of the neighbourhood. These regulations defined by Consumer Affairs Victoria are as follows:

  1. Maintenance of the property (i.e., safeguarding of property and smoke alarms)
  2. Professional cleaning of the property
  3. Damage and fair wear and tear (These regulations also define damage done by pets)
  4. Urgent Repairs
  5. Endanger (For example, violence)

Above guidelines or regulations are also considered by the Victorian Civil and Administrative Tribunal (VCAT) for particular applications. These applications are reviewed under the Residential Tenancies Act 1997

What are the Civil Penalties and Compensations for Short-Stay Regulation Violations?

The occupant can access the Owner’s Corporation for resolving their disputes. Owner’s Corporation Act 2006 provides laws and penalties for the short-term accommodations in Australia. Besides penalties, this important law provides guidelines on actions VCAT can take against the short-term accommodations. For example, prohibiting the renter from renting out the space if breach of rules has been found. Moreover, compensation for loss of amenities has also been provided under this act. According to this law, 

  1. The occupant will be compensated for the loss of amenities with $2000 at maximum by VCAT.
  2. The maximum penalty fee for the violation of short-stay regulations is $1000.

The penalties are collected by the Victorian Property Fund. For more information, you can read short-term rental regulation under Owners Corporation Act 2006.

Why is Melbourne an Ideal Place for Short-Term Rentals?

In 2022, a report by Airbtics said that there’s a shortage of short-term rentals in Melbourne. The steady rental yield is very attractive, approximately 3%, for the new renters to enter the vacation rental market in Melbourne. 

Cutting the long story short, we can say that there’s a great opportunity for the new renters to start their renting business as a side hassle. As a passive income, 58% of the houses listed on Airbnb have earned $3,459 in a month, as said by the same report.

You can also be one of these luckiest people who have managed to earn extra income in 2022. The housing crisis in Melbourne has worsened. As a result, there’s a dire need of new rentals in this city of Victoria where visitors are rushing to fulfil their desire of popping in at the exquisite places.

What is the Rental Crisis in Melbourne?

In a report published by Greens, the profitability and unregulated short stays has reduced the supply of long-term rentals in Melbourne. As a result, many landlords and people who are seeking a long-term residency in this lively city find the rents very high. 

To resolve the issue of short supply of long-term residencies, many recommendations have been provided by the Greens to tighten the regulations for short-term accommodations to increase the availability for the long-term accommodations.

  1. A 90-days cap on the maximum stays in short-term rentals
  2. Allowing only primary residencies to be used for short stays. Currently, the secondary residencies are also being used for short-term rentals in Melbourne.
  3. A mandatory public register of short-stay operators.

These regulations, if approved, won’t harm the interests of the short-term rental’s landlords. Indeed, these procedures will resolve the rental crisis in Melbourne. However, you need to be familiar with rental business in Melbourne to ensure compliance.

Sometimes, it becomes difficult listing and managing your short-term accommodation business in Melbourne due to the unavailability of the host round the clock. In that case, you can hire an agent who will perform the all the hosting tasks like a pro and take your business to the elevated level. If you’re also one of these people who cannot manage their rental business, you can reach the best property management company in Melbourne. Houst is one of the ideal companies that is equipped with all the resources and skills to manage your properties professionally and skilfully. Are you thinking how Houst can help you? We have a guide on it. Let’s discuss!

What Does Houst Do for You?

Houst provides premium hosting services to its valuable clients. Sometimes, the hosts wish to list their property on online platforms. Nonetheless, they don’t have time to do market research, calculating the pros and cons of listing their business on different platforms. On the same line, they find it difficult to learn about all the short-term rental regulations. So, they’re highly likely to miss out on some regulations, failing to list their business. 

In this scenario, Houst comes for your help. Houst analyses your property and provides the best listing services for your business. Houst also takes into consideration the local regulations with the help of the professionals who provide the best legal advice on short-term rentals. As a result, your rental business is safe to start the rental journey and your business can operate legally on all platforms without any penalties or objections. In short, we can say that Houst accelerates the pace of listing and earning revenues with their matchless listing and property management services.

Houst provides the following outclass services for short-stay rentals in Melbourne:

  1. Impeccable Listing Services
  2. Reliable Property management Services
  3. Professional Hosting Services

Ensuring transparency, Houst offers the client with an interactive dashboard. These easy-to-use dashboards provide useful insights on your business. Moreover, the client can track the performance of the business from the comfort of his home.

Curious to see how much you could earn on Airbnb? Schedule a free, no-strings-attached consultation with our Airbnb Management Melbourne team to uncover your property’s revenue potential.

The Bottom Line

Finally, we conclude that Melbourne laws are the most favourable for launching a rental business. However, there are slight differences between Victoria state’s regulations and Melbourne’s. You need to do proper research and obtain guidelines before listing your business. As a result, you will be able to better manage your short-term rental business in Melbourne.

Short-term letting is highly attractive and profitable and you can also take advantage of this profitability with the help of Houst. We offer the best short stay and hosting services in Melbourne to ensure your income more than doubles in the minimum possible time. Our reliable services guarantee the proper listing, top-tier hosting services and excellent property management services.

The Insider @ Houst

The Insider @ Houst

The Insider team provides up-to-date and relevant information on short-term rentals to help navigate the world of short lets. If you're interested in publishing your content, please get in touch with us at

The Insider @ Houst

The Insider @ Houst

The Insider team provides up-to-date and relevant information on short-term rentals to help navigate the world of short lets. If you're interested in publishing your content, please get in touch with us at

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