Airbnb’s tightening time, short-term rental

An industry operator warned that a foreign investor ban would prevent short-term rental accommodation in Australia for holidaymakers.

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Industry operators warn that a two-year ban by the tax bureau will hit Airbnb and short-term rental markets.

The ban started on April 1 this year and was partially supervised by the Australian Tax Office, and all foreign property buyers are now unable to buy established homes in Australia with “limited exceptions”.

“This includes temporary residents buying established residences as primary residences,” the ATO said, which covers residents like international students and contract workers, but operators fear the consequences will be the biggest hit to the holiday market.

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Short term accommodations want to use Airbnb and similar locations to list the destinations in the south of Lismore. Image source: Istock

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But Seiko, managing director of short-term rental property management company Bodhitree Group, warned that the foreign investor ban would provide vacationers with the largest short-term rental accommodation in Australia.

Foreign property buyers often buy homes for rental purposes, including Airbnb, and these figures may fall over the next two years, she said.

“If there are fewer properties available for short-term rentals, this would be a huge loss for industries and visitors who benefit from these unique accommodation options,” she said.

“In my experience, local owners tend to have different priorities compared to foreign investors. Usually, they are less likely to offer property with short-term rent.”

“Instead, they may choose to live in the property themselves or rent them for a long time. These factors may affect visitors’ flexibility, pricing and availability.”

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Seiko MA, Managing Director of Bodhitree Group.

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“Whether it’s going to work or travel leisurely – there are fewer Airbnb options available in certain cities or regions.”

“So many may have no choice but to turn to traditional accommodation options such as hotels or vacation apartments.”

Ms Ma said the rise of Airbnb and other short-term rentals had a “deep positive impact” on the tourism industry.

“They not only provide businesses and leisure travelers, many cleaners, gardeners and soldiers with an affordable and flexible option, but also the opportunity to work from the neighborhood of home.”

“Tourists who stay at Airbnb tend to spend money differently than hotel guests. They often cook their own meals, shop at local supermarkets, and visit cafes and other neighborhood businesses.”

Ms. Massachusetts said Airbnb and short-term rental users tend to use local businesses frequently, shop, eat, and visit cafes.

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“In addition, they are more likely to explore areas other than traditional tourist hotspots, which leads to wider tourism spending in local communities.”

According to the ATO, during the two-year ban, foreign investors are only able to purchase established property only if they demolish at least 20 additional homes on the land within 4 years from the date of demolition approval.

“If a significant increase in Australia’s housing stock is added, we usually approve applications for purchasing and developing established residences. This applies to development proposals to: retain established residences; demolish established residences or rebuild vacant vacant lands that were previously resided on them.”

But it said that different rules apply to applications starting April 1, 2025, which must be vacant at the settlement and no part will be occupied until the new residence is completed.

When purchasing or selling residential land, foreign investors must also notify the register of foreign ownership of Australian assets and additional taxes such as foreign investor surcharges and land taxes, depending on location and property type.

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