Short-term rental rules in NSW and Victoria are changing how hosts manage their properties. But the two states are not following the same path. In NSW, the main rules focus on STRA registration, fire safety, and limits on some non-hosted short-term rentals. In Victoria, the biggest statewide change is the 7.5% short-stay levy, along with new powers for owners’ corporations to restrict short stays in some buildings.
For property owners, that means one thing: you need to understand the rules that apply in your state, your local area, and your building before you rely on short-term letting as a strategy. This guide is general information only and should not be treated as legal or tax advice.
Key Takeaways
- NSW has a clear STRA framework covering registration, fire safety, and caps for some non-hosted properties.
- In NSW, the 180-day cap applies to non-hosted STRA in certain areas, including Greater Sydney.
- In most of Byron Shire, the non-hosted cap is 60 days per year, not 180.
- In NSW, bookings of 21 consecutive days or more do not count towards the non-hosted cap.
- Victoria’s main statewide reform is the 7.5% short stay levy on many bookings under 28 days.
- In Victoria, owners’ corporations can ban short stays in some developments by special resolution.
- Local council rules and building rules can also affect whether and how a property can operate.
What Laws Have Changed in NSW?
NSW has one of the most structured short-term rental frameworks in Australia.
All eligible STRA properties must be registered on the NSW STRA Register. Hosts also need to meet the required fire safety standards and display their STRA Property ID on online listings.
The biggest issue for many owners is the cap on non-hosted short-term rentals. In certain parts of NSW, non-hosted STRA can only operate for a limited number of days each year under the exempt development pathway.
Where the 180-Day Cap Applies in NSW
The 180-day cap applies to non-hosted STRA in:
- Greater Sydney
- Ballina
- certain land in Clarence Valley
- certain land in Muswellbrook
This cap does not apply the same way to hosted STRA, where the host lives on the premises.
Byron Shire 60-Night Cap
From 23 September 2024, non-hosted STRA properties in most of Byron Shire will be limited to 60 nights per year. This is a reduction from the previous 180-day cap on short-term rentals. However, properties located within designated 365-day precincts in Byron Bay town centre and Brunswick Heads are exempt and may continue operating year-round. (Byron Shire Council)
Mandatory STRA Registration
All short-term rental properties must be registered via the NSW Planning Portal before being advertised or offered for short-term rental. Failure to register may result in delisting from booking platforms and potential fines. (NSW Government)
Fire Safety Compliance
Hosts are required to comply with the STRA Fire Safety Standard, which includes:
- Installing smoke alarms in accordance with AS 3786.
- Displaying evacuation diagrams at the entrance and in each bedroom.
- Ensure the presence of fire extinguishers and fire blankets in the kitchen.
These measures are mandatory for both hosted and non-hosted listings.
Local Council Authority
Councils have the authority to impose additional restrictions through Local Environmental Plans (LEPs). For instance, some Sydney councils may introduce zoning regulations that limit STRA operations in certain residential buildings or apartment complexes.
These regulatory updates aim to standardise STRA operations across NSW and improve housing availability. Whether you are listing a coastal retreat or a city apartment, understanding and complying with these regulations is essential for legal operation.
The 21-Day Exemption Matters
One of the most useful rules for owners is this: in NSW, bookings of 21 consecutive days or more do not count toward the non-hosted cap. That can make a big difference to how you manage your calendar. It creates more flexibility for medium-term stays, executive bookings, and relocation guests.
Many hosts assume the cap resets each calendar year. In practice, the cap is tied to the property’s 12-month registration annual period, not simply January to December.
What Has Changed in Victoria?
Victoria’s short-stay market is facing some of the most sweeping reforms in Australia. A statewide 180-night cap on unhosted STRAs is already in place, but some councils, such as those in Mornington Peninsula and inner Melbourne, are now moving to cut that down to just 90 nights per year. The aim is to ease local housing pressure in popular but supply-strained regions (NSW Government).
From 1 January 2025, a 7.5% Short Stay Levy was applied to all bookings under 28 days. This levy is automatically deducted from most earnings by platforms like Airbnb and Stayz and will fund affordable housing initiatives across the state. For hosts managing bookings directly, manual reporting and payment to the State Revenue Office are required.
Collectively, Victoria holiday rental restrictions reflect a clear policy shift, which reduces the number of STRA properties in key markets to improve access and affordability for long-term residents. For hosts, it is a decisive moment to re-evaluate their approach to short-term letting.
Important Levy Exclusions
Not every Victorian short stay is caught by the levy.
A short stay in a property that is the principal place of residence of the owner or renter is generally excluded. Some other accommodation types, such as hotels and similar premises, are also treated differently.
Owners Corporations Now Have More Power
From 1 January 2025, owners corporations in Victoria can make rules banning short stay accommodation in their developments by special resolution, except where the lot is the owner’s or occupier’s principal place of residence.
This means apartment owners need to do more than check state rules. They also need to review building rules before listing a property.
Local Council Rules Still Matter
In Victoria, local requirements can vary between councils. Some councils have their own short-stay registration or compliance processes, so owners should always check the local position rather than relying on statewide rules alone.
NSW vs Victoria: The Key Difference
The simplest way to understand it is this:
- NSW focuses on registration, safety rules and day caps for some non-hosted properties.
- Victoria currently focuses more on the short-stay levy, local variation and owners’ corporation controls.
That distinction matters because the best rental strategy in one state may not suit another.
How to Stay Compliant
In NSW, hosts must register their property through the STRA portal, display a valid PID number, and meet strict fire safety requirements, including evacuation diagrams and smoke alarm compliance. In VIC, annual council registration and reporting are now standard in many LGAs, with permit requirements depending on location. These real estate legislation changes in 2025 have made part-time or ad hoc Airbnb hosting harder to sustain. You need documented approvals, consistent updates, and accurate listing information to avoid penalties or deactivation.
It is also smart to factor in Airbnb tax implications for 2025, from Victoria’s 7.5% levy to potential deductions and reporting obligations. If you are unsure how these changes apply to your property, consider speaking with a legal adviser or partnering with an Airbnb management company familiar with local short-stay laws.
In NSW
- Confirm whether your property is hosted or non-hosted.
- Check whether your location is subject to the 180-day cap or Byron’s 60-day rule.
- Register the property on the NSW STRA Register.
- Meet the required fire safety standards.
- Display your STRA Property ID on your listing.
- Track bookings against the registration annual period.
- Use 21+ night stays strategically where suitable.
In Victoria
- Check whether the property is excluded from the levy, especially if it is your principal place of residence.
- Confirm whether bookings are taken through a platform or directly.
- Review any owners’ corporation rules if the property is in a strata-style development.
- Check whether your local council has registration or compliance requirements.
Not Eligible to Operate Year-Round? Here’s What to Do
If your property is in a capped NSW market, or if local or building rules make traditional short stays harder to run, you still have options.
A more flexible model may work better, including:
- Medium-term stays
- Executive stays
- Relocation bookings
- Flexi-letting across short-, mid-, and longer stays
If nightcaps and local council restrictions restrict your ability to host year-round, you still have options. Medium-term leasing, typically 3 to 6 months, is increasingly popular with families relocating to Sydney or remote workers needing flexible stays. You can also partner with a licensed STR management company that already operates within compliance limits.
Another option is to reclassify your property for student housing, corporate travel, or longer leases to help maintain steady returns. You can also block your calendar to focus on peak demand periods, such as Vivid Sydney or school holidays, while offering discounts during quieter weeks to maintain strong occupancy. These adjustments ensure your investment remains active, even under tighter regulations.
You might be interested to know more about Why travellers prefer short-term rentals over hotels?
What does this mean for STR Hosts and property owners
The impact of these new regulations is both financial and operational. Unhosted listings in areas like Byron Shire could lose over 300 potential rental nights each year due to strict nightcaps, which slash income for many hosts. Add to that the 7.5% levy in VIC, and the pressure on margins increases further.
Hosts now face greater compliance obligations, from STRA registration and council permits to safety audits and zoning rules. Those managing multiple properties already feel the weight of administration and the risk of penalties for non-compliance.
The rental income forecast for 2025 suggests continued pressure, with many owners rethinking the viability of STR models and pivoting toward long-term leases. For investors, this marks a shift in the landscape: property investor risk management now requires close attention to local legislation, seasonal caps, and council-by-council differences. What worked last year may no longer hold in 2025.
Make sure you’re covered: How to stay legally protected?
Staying legally protected starts with knowing your zoning and registration status. In NSW, use the STRA Planning Portal to confirm eligibility and renew your STRA listing annually. In Victoria, check with your local council for current permit and reporting obligations, as these requirements vary widely between LGAs.
It is also smart to keep documentation up to date: proof of guest stays, fire safety compliance and insurance details. If any part of the process feels unclear, speak to a solicitor or an experienced short-stay manager who knows the local landscape.
The Australian short-let market outlook suggests that while supply may shrink under these new rules, compliant hosts who refine their strategies and maintain high standards are more likely to succeed in this tighter, more competitive environment.
Get personalised management solutions for your property with L’Abode Accommodation.
If recent legal changes have made managing your Airbnb feel overwhelming, L’Abode Accommodation offers a smart solution. Our team provides full-service property management across Sydney, Melbourne, and other major cities, and it handles everything from compliance and guest communication to cleaning, styling, and pricing strategy. We stay on top of legislative shifts to ensure your listing remains compliant and competitive.
Whether you are a hands-off investor or simply tight on time, partnering with us at L’Abode ensures your short-term rental continues to perform, even in a tougher market.
