The 180-day Cap on short-term rentals impacts how property owners manage their listings on platforms like Airbnb and Booking.com. As a host, you must know how to navigate this restriction to maintain a steady rental income while remaining compliant. In this guide, I discuss key aspects of the 180-day cap rule on short-term rentals, its implications for property owners, and strategies to maximise earnings within these limits.
What is the 180-day Cap on short-term rentals?
As the name suggests, this regulation limits the duration for which you can list your short-term rental. It aims to ensure a fair balance between the booming short-term rental market and the traditional real estate market.
This rule applies primarily to non-hosted short-term rentals in specific regions of New South Wales where the owner does not reside on the premises. Under this Cap, property owners can only rent out their homes for a maximum of 180 nights per year.
The regulation, which came into effect on November 1, 2021, requires all short-term rental accommodation (STRA) properties to register through the NSW Planning Portal and comply with fire safety and planning guidelines. The rule is intended to curb housing shortages in high-demand areas while still allowing homeowners to generate income from their properties.
Where is the 180-Day Cap Enforced?
Below are the regions where the 180-day cap on short-term rentals applies to non-hosted STRAs:
- Greater Sydney (excluding the Central Coast).
- Ballina area.
- Certain land in the Clarence Valley area.
- Certain land in the Muswellbrook area.
It is worth noting that there is no restriction on the number of rental days per year for hosted short-term rentals where the host resides on-site.
Steps to Register Your STRA Property:
Here are the basic steps you need to follow to ensure compliance with the 180-Cap rule.
1. Gather required documents
Ensure you have:
- Proof of ownership.
- Compliance with fire safety standards.
- Land title details.
2. Submit your application
- Register through the NSW Planning Portal.
- Pay a $65 application fee for the first 12 months.
3. Obtain your STRA ID
- Once approved, you’ll receive a unique STRA Property ID.
- You must display this on all listings, including Airbnb, Booking.com, and other platforms.
Need to know about How To Calculate ROI Rate For Your Short-Term Rental Property 2025?
Make the Most of Your STRA Income: Smart Strategies
If you rely on STRA income, navigating the 180-day Cap on short-term rentals can be challenging, but do not worry, because there are some strategies you can implement to boost your earnings. Below are the three main ones:
Convert to Long-Term Rentals for 6 months
One of the most effective ways to optimise your STRA income is to switch between long-term and short-term rental models based on the season. Since non-hosted short-term rentals are limited to 180 days per year, you can fill the remaining time by offering stays of 90+ days, which is classified as long-term rentals.
How it works:
- Platforms like Airbnb, Stayz, and Flatmates allow you to list your property for extended stays.
- Long-term bookings help ensure consistent rental income while reducing vacancies and operational costs.
- Many tenants looking for mid-term housing include corporate employees, students, or families in transition.
Peak season advantage:
You can boost your earnings even further by scheduling your short-term rentals during peak seasons when the demand is highest. For instance:
- Summer months and holiday periods tend to attract the most visitors. You can charge premium rates during this period for your short-term rentals in Melbourne, Sydney and other high-traffic regions.
- Wine and food festivals, concerts, and seasonal events in the Hunter Valley and Sydney often drive high tourist demand.
Read more: Airbnb vs. Long-term Rental: Which Is More Profitable?
Utilise the property as a Hosted STRA
If you live on-site, you can avoid the 180-day Cap entirely by qualifying as a hosted STRA. This unlocks unlimited rental days per year and provides greater flexibility and better income potential.
Options for Hosted STRAs:
- Rent out individual rooms:
You can rent out a private room while continuing to live on the premises. This setup works well for spare rooms, granny flats, or separate guest units. It is a great way to earn passive income while maintaining full control over your property.
- Split property usage:
Here, you live in the property for part of the year and rent it out when you are away. If this model works for you, you will enjoy the benefit of living in your property most times of the year.
Benefits of Hosted STRAs:
- There are no cap restrictions, meaning you can rent year-round.
- Lower vacancy risks, as your presence deters potential property damage or misuse.
- You have the opportunity to offer premium experiences, such as guided local tours or personalised hospitality.
Rent Without a Booking Platform
Instead of relying solely on platforms like Booking.com or Airbnb, you can secure bookings through private rental agreements. Below are the other rental channels you can consider:
- Partner with L’Abobe Accommodation or corporate housing agencies:
L’Abobe specialises in connecting property owners with long-term tenants, such as business travellers, remote workers, and expatriates. Due to the quality of the hosting services, you are more likely to see repeat business, hence better returns.
- Secure Long-Term bookings from business clients:
Many companies often seek fully furnished homes for their employees. If your property is located not far from the workplace, this is a great way to earn a steady income. Rental properties in or around major towns can benefit from this option.
- Lease directly to guests:
If you have the time and skills, choose to set up your property website or use social media to promote your rental. There is also the option to advertise on local real estate listing sites to attract tenants seeking short-term accommodation rentals.
How to Manage Your Short-Term Rental for Success?
Managing a short-term rental requires more than just listing your property online. To maximise profitability and ensure compliance with NSW’s 180-day Cap on short-term rentals, you should focus on pricing strategies and guest experience. The goal is to keep up with seasonal demand and respond promptly to guest inquiries so as to secure positive reviews and repeat bookings.
For investors who prefer a hands-off approach, L’Abode Accommodation offers all-around short-term rental management services. We handle everything from marketing and pricing optimisation to guest communication and property maintenance. With a hands-on approach to property management, we will help you maximise returns while minimising operation stress and costs.
Need to know about Pros and Cons of short term rental.