Victorian Greens shape up for housing fight over Labor’s proposed Airbnb levy

The Greens are setting the stage for a fight with the Victorian government over its proposed Airbnb levy, armed with new figures that show the measure will only make a “marginal” difference to the number of homes freed for renters.

Announced last year as part of the government’s plan to tackle the housing crisis, the 7.5% levy on short-stay properties leased through platforms such as Airbnb and Stayz is expected to be included in the state tax bill, which will be tabled in parliament after next week’s budget.

The levy, described at the time by former premier Daniel Andrews as “modest”, is forecast to raise $70m annually by 2025/26. Andrews said “every single dollar” would be spent maintaining and building social and affordable homes.

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To pass the measure – an Australian first – without the support of the Coalition, the government would need the votes of the four Greens MPs and two other crossbenchers in the upper house.

But the new Victorian Greens leader, Ellen Sandell, said her party would not support the levy in its current form.

“Labor will need the Greens’ votes to get their short-stay legislation through the parliament and we’re not going to accept something that does nothing to get homes on to the long-term market,” Sandell told Guardian Australia.

“We want something that actually helps fix the situation for renters and people who want to buy a home to actually live in.”

Sandell – who was elected the party’s leader last week after her predecessor Samantha Ratnam announced she was stepping down to contest the federal seat of Wills – said she wants the government to introduce stronger regulations for short-stay accommodation to coincide with the levy, including a 90-day cap on listings.

The Greens commissioned Victoria’s Parliamentary Budget Office (PBO) to compare the impact of the government’s levy with the party’s proposed 90-day cap, a measure already used elsewhere, including in Perth and London.

The PBO found the average short-stay owner would pay about $2,083 annually per property under the government’s levy and it said it expected most would “absorb some of this tax burden” and “pass a portion to the consumer through higher prices”.

The PBO said the levy would make a “marginal” difference to property investor behaviour, particularly in areas such as the Mornington Peninsula and the regions, and to those who used their short-stay rental as a residence for part of the year.

It said owners of short-stay properties in Melbourne’s CBD – where there is more competition – may be “less able to pass the levy on to consumers” and could have a “material incentive” to shift their properties to the long-term rental market.

Meanwhile, the PBO’s analysis of the Greens’ proposal estimated there were 36,000 short-stay properties in Victoria, of which 13,000 were rented for more than 90 nights each year.

It said this group of property owners would face “reduced returns” if a cap were imposed and “may be particularly incentivised to seek alternative uses for their property”.

Sandell said this could include making them available to long-term renters or selling to owner-occupiers.

She said the upcoming budget was an opportunity for Labor to stop “tinkering around the edges” and introduce reforms to “free up thousands more homes”.

“If Labor think they can keep getting away with doing the bare minimum on housing, well they’re going to have a fight on their hands,” Sandell said.

“Rents in Victoria are at record highs and a whole generation has given up the dream of ever being able to afford their own home.

“It is a housing crisis and we need some bold reform and ideas to fix it.”

With both costings, the PBO said it was limited by the lack of public data available on short-stay accommodation. This included the total number of short-stays operating in the state, the number of nights each one operated and their revenue.

Last year, Andrews said there were between 30,000 and 40,000 homes on Airbnb and other short stay platforms that were not available for long-term tenants.

“There are a significant number of properties that would have, 10-15 years ago, been available for longer-term rental, for a year, for two years,” he said.

“They’re not available because of that.”