New South Wales and Victoria Change Australia Travel Accommodation Rules to Protect Long-Term Rentals

Written By: Manab Baidya

Manab Baidya

I am currently studying for MA in English while also currently pursuing Journalism at Dibrugarh University. Passionate about storytelling, media, communication, and creative expression through words. Working as a Content Writer in the travel and tourism industry, where I transform destinations, experiences, and cultures into engaging stories. Constantly learning, exploring new ideas, and building a journey driven by creativity, curiosity, and meaningful content. Believer in growth, good vibes, and the power of words to connect people across the world.

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September 3, 2026 12:12 PM

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New south wales and victoria to strengthen rules on short stays to protect long term rentals. New south wales and victoria are poised to become pioneers in efforts to reign in the burgeoning industry of short term holiday accommodation rentals. The move by australia’s two biggest states comes as authorities seek to curb the growth of such accommodation and protect long term house rentals.

The debate has intensified as tourism destinations and major cities experience a shortage of available rental homes alongside rising housing costs. While short-term rentals continue to support tourism activity, concerns have increased that some properties previously available for residents are being redirected towards visitor accommodation.

Across Australia, a combination of registration systems, rental caps, financial levies and planning restrictions is being introduced to create a balance between tourism demand and the need for stable long-term rental options.

Australia’s Short-Stay Rental Growth Creates Housing Pressure

Short-term accommodation has become an important part of Australia’s visitor economy, particularly in coastal destinations, major cities and regional tourism areas. Holiday rentals provide additional choices for travellers and generate income for property owners and local businesses.

However, the rapid expansion of short-stay accommodation has also created concerns about the availability of homes for permanent residents. In areas with high tourism demand, properties can generate stronger returns through short-term bookings compared with traditional long-term leases, encouraging some owners to prioritise holiday accommodation.

The issue has become particularly visible in areas where rental vacancy rates remain low and local workers struggle to find affordable housing close to employment centres and tourism hubs.

Research examining Australian short-stay policies has found that governments are increasingly focusing on reducing pressure on the long-term rental market through targeted regulation rather than completely eliminating holiday accommodation.

New South Wales Introduces Stronger Short-Term Rental Controls

New South Wales has created one of Australia’s most developed short-term rental regulatory systems. The state requires most short-term rental properties to be registered and places obligations on hosts, guests and booking platforms.

The regulations are designed to monitor the growth of holiday rentals while ensuring local housing markets are not excessively affected.

Greater Sydney’s 180-day annual cap was introduced to reduce the conversion of residential homes into full-time visitor accommodation. In Byron Shire, where tourism demand has placed significant pressure on housing availability, a stricter 60-day limit has been applied.

The approach reflects concerns that popular visitor destinations can experience a shortage of homes for essential workers, families and local communities when too many properties move into the holiday rental market.

Victoria Uses Financial Measures to Support Housing Supply

Victoria has taken a different approach by introducing a financial measure aimed at changing the economic balance between short-term and long-term rentals.

A 7.5% short-stay accommodation levy has been introduced for stays of fewer than 28 days. The measure is designed to make long-term rental arrangements more attractive while generating additional funding for social and affordable housing initiatives.

Early evidence suggests that growth in short-term rental listings has slowed following the introduction of the levy. However, the longer-term impact on rental availability remains under assessment.

The measure highlights Victoria’s attempt to address housing pressure without removing short-term accommodation completely, recognising the role holiday rentals play in supporting tourism businesses and regional economies.

Western Australia and Tasmania Strengthen Local Controls

Other Australian states have also introduced measures targeting short-term rental growth.

Western Australia has focused on giving local governments greater control over where short-term accommodation can operate. Councils can restrict short stays in certain land-use zones, while properties in parts of metropolitan Perth may require approval when operating beyond specific annual night limits.

An incentive payment of A$10,000 has also been introduced to encourage some property owners to shift homes from short-term holiday use into the long-term rental market.

Tasmania has focused strongly on improving data collection by requiring platforms to provide detailed listing information. Hobart has also moved towards tighter planning controls that could restrict new short-term rental permits in residential areas.

Early Results Show Regulation Can Reduce Pressure But Not Solve the Crisis Alone

Evidence from Australia and overseas suggests that short-term rental controls can have an impact, but they are not a complete solution to housing shortages.

In Byron Shire, tighter restrictions have contributed to a decline in short-term rental listings, with some properties returning to the long-term market. However, researchers have warned that longer observation periods are required before the full housing impact can be measured.

International examples provide further insight.

Research from international markets suggests that regulation can reduce competition between holiday rentals and long-term housing, but wider housing factors continue to influence rental prices.

Policy Timeline and Current Status Across Australia

Australia’s short-term rental reforms have been introduced gradually over several years, with states adopting different approaches based on local housing pressures and tourism demand.

Challenges Preventing a Full Shift Back to Long-Term Rentals

Although governments are encouraging owners to return properties to the long-term rental market, several barriers remain.

Some holiday homes located in scenic or remote tourism areas may not be suitable for permanent residents due to limited services, transport links or employment opportunities.

Other owners may prefer short-term rentals because they allow personal use of the property or provide greater flexibility. Properties owned without significant mortgage costs may also be less affected by financial penalties or restrictions.

This means stricter rules could potentially result in some properties being left vacant rather than entering the long-term rental market.

Better Data and Stronger Enforcement Needed

A major challenge identified across Australia is the lack of consistent data on short-term rental activity.

Reliable information is needed to determine:

• how many properties operate as short stays
• whether regulations are being followed
• how rental markets are changing
• whether policies are increasing long-term housing supply

Greater cooperation between governments, councils and booking platforms has been identified as essential for effective enforcement.

Future of Australian Tourism and Housing Balance

Australia’s short-term rental reforms represent a growing effort to balance tourism growth with community housing needs.

Holiday accommodation remains an important part of the travel economy, supporting regional destinations, local businesses and visitor experiences. However, governments are increasingly focused on ensuring tourism expansion does not reduce housing opportunities for residents.

New South Wales and Victoria are leading this policy shift through different approaches: NSW through rental limits and registration, and Victoria through financial measures supporting affordable housing.

New South Wales and Victoria have imposed new restrictions on short-term lets to cushion an undersupply of housing and soaring rents that have put pressure on the supply of residential real estate. The new rules are meant to limit the impact of holiday rentals on the availability of long-term leases.

The future of the policy is unclear as it remains to be seen if the regulations will spur the conversion of some short-term leases into long-term housing rentals. The restrictions set by the new South Wales and Victoria will require a careful balancing act of ensuring there is enough accommodation for tourists while keeping the pressure off the residents.