Downsizers are expected to be among the big winners from moves across Australia to crackdown on the worst excesses of the flourishing short-term holiday letting industry.
Downsizing.com.au has undertaken an analysis of how Australian State Governments are seeking to manage letting platforms, such as Airbnb and Stayz.
This analysis finds that NSW is on-track to have Australia’s most downsizer-friendly laws, followed by Victoria, Tasmania and Western Australia.
The issue remains a political hot potato in South Australia, while the Queensland Government is at this stage buck-passing the problem on to local councils.
For the increasing number of downsizers moving into apartments and townhouse complexes, short-term holiday letting regulation is of significant interest.
As a general rule, downsizers would prefer to live alongside other owner-occupiers and are not particularly keen on the potential disruption caused by short-term holiday makers and visitors continually coming and going from their complex.
- OUR STATE-BY-STATE REPORT CARD ON SHORT-TERM HOLIDAY LETTING LAWS
- ‘THEY DON’T WANT TO SHARE LIFTS WITH STRANGERS’: THE QUEENSLAND PROJECT ATTRACTING AIRBNB TOWER ESCAPEES
The NSW regulatory framework will arguably be the toughest in Australia, which should give comfort to downsizers worried about noisy parties and strangers entering their complex.
Unfortunately, it has taken a long time to get this framework in place, with the government yet to commence laws which were first passed by NSW Parliament in 2018.
The government has confirmed to Downsizing.com.au that it is expecting to commence this law - and a raft of supportive regulation - in the first half of this year.
Key planks of the NSW Government framework includes:
- Allowing body corporates (following a 75 per cent majority vote) to adopt by-laws that prohibit a person who owns or rents an apartment from offering short-term letting, but only where they do not use the lot as their principal place of residence.
- Five-year bans for hosts, guests and dwellings, if there are two serious breaches of a mandatory ‘code of conduct’ in two years - such as behaviour which unreasonably interferes with a neighbour’s peace and quiet.
- Planning laws which allow short-term holiday letting up to 180 days per year in Greater Sydney and up to 365 days allowed in all other areas of New South Wales, if a host is not present.
The government is still considering whether to establish a register of premises used for short-term holiday letting.
In a response to Downsizing.com.au received on February 10, John Tansey from the NSW Department of Customer Service said the government was “committed to establishing a framework that balances the rights of homeowners to reasonably use their properties as they wish, while protecting communities from anti-social behaviour and other adverse impacts such as noise.”
“The final details of the framework are being determined following public consultation in late 2019 and a commencement date has not yet been formally set.”
“However, the amendment to the Strata Act is expected to commence with the other elements of the framework in the first half of 2020.”
The Victorian Government introduced legislative changes in February 2019 to help prevent short-term accommodation apartment buildings being used to host unruly parties.
The reforms allow owners corporations and residents to take apply to the Victorian Civil and Administrative Tribunal to impose fines, award compensation and issue bans against occupants following anti-social behaviour.
In addition, the law allows the tribunal to ban apartments used for unruly parties from being rented for holiday letting, if the apartment has been issued with three breach notices in a 24-month period.
The Victorian law is a good start, but falls well short of the NSW system which will allow body corporates to ban investor-led short-term holiday letting across an entire complex, without the need to approach an external tribunal.
Tasmania was also quick out of the blocks with a relatively modest regulatory package in mid-2019 which will require dwellings used for short-term holiday letting to state whether they meet the State’s planning laws, including display a permit number if necessary.
Prior to this, in 2018, the government provided greater clarity about when a planning permit was required for holiday letting.
The Tasmanian model puts the focus back on dwelling owners to be compliant with the State’s planning laws, when offering short-term holiday letting. However, it does not empower body corporates to be able to take action, like the NSW or Victorian systems.
The Western Australian Government announced just a few weeks ago that it would be supporting the mandatory registration of short-term holiday rental properties, to “highlight that due process has been followed” and that the properties are “legitimate short-term rentals”.
The government has also announced it will tighten planning rules, particularly to create different approval pathways for hosted and unhosted holiday letting. It is possible that hosted holiday letting will be exempt from approval, while local councils will be able to regulate unhosted accommodation.
The government, however, has baulked at the suggestion by a parliamentary committee that model by-laws be created which allow strata body corporates to ban holiday letting.
It is not known when the Western Australian regulatory framework will come into place. The reforms will improve transparency around short-term holiday letting, which is likely to weed out unscrupulous operators, but are not as downsizer-friendly as NSW and Victoria.
There has been little action in South Australia, apart from the release of an Opposition draft bill suggesting the mandatory registration of short-term holiday letting activity and penalties for misbehaviour by hosts or occupants. This bill is likely to be put to a vote during 2020.
The Queensland Government has ruled out Statewide regulation on short-term holiday letting, which leaves the issue to be decided by local council policies.
Tourism Minister Kate Jones said in November last year: “The biggest challenge for us is the fact that there is no consensus across the tourism industry and among councils.”
“Mayors keep telling us they don’t want a one-size-fits-all policy. We’re not going to force rules on councils and tourism operators that they don’t want.”
Such a policy means downsizers are best doing their homework about local council rules, before moving into a general apartment or townhouse.
All up, Australia’s States have all taken very different approaches to regulate the burgeoning short-term holiday letting industry.
To easily compare different approaches, download our State by State regulation report card.
These approaches range from the Queensland “leave it to the local mayor” approach, right through to NSW’s slow-moving and downsizer-friendly mountain of regulation.
Importantly, this is an issue which predominantly effects general housing, but not retirement-specific properties such as retirement villages or land lease communities.
This is because these retirement-specific properties have a minimum age for occupants and are generally subject to village rules which require guests to be pre-approved, which tends to remove the possibility of them being used for short-term holiday letting.
In addition, downsizers may consider seeking out a complex specifically designed for themselves and other owner-occupiers.
DISCLAIMER: This story represents only one interepretation of regulation. Buyers should rely on their own inquiries about the relevant regulation in their own State, Territory or local council area, before making any purchases.