Canberra Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Canberra

If you're considering starting a short-term rental business in Canberra using platforms like Airbnb or Vrbo, it's important to understand the regulations and requirements.

As of November 1, 2021, the NSW Government introduced a statewide regulatory framework for STRs. Key requirements include:

• Registering your STR property on the NSW Government's STRA Register. There is a registration fee of $65 for the first 12 months and an annual renewal fee of $25.
• Ensuring your property meets fire safety standards, with adequate smoke alarms, evacuation diagrams, fire extinguishers, and fire blankets as required.
• Complying with the Code of Conduct for the Short-term Rental Accommodation Industry. This sets out minimum standards and obligations for hosts, guests, and booking platforms.

In the Canberra region, hosted STRs where the host is present can operate year-round without limits. However, non-hosted STRs are restricted to a maximum of 180 days per year, as Canberra is within the Greater Sydney region.

It's also important to check if your property is in a strata building, as some have by-laws prohibiting STRs where it is not the host's principal place of residence. Over 700 properties were available for STRs in Canberra as of July 2022.

According to data from Airbtics, a 2-bedroom apartment in Canberra can generate up to A$51,823 in annual revenue on Airbnb. Some of the most profitable suburbs for STRs include Braddon, Canberra City Centre, and Kingston.

However, the growth of STRs has raised concerns about impacts on housing affordability and availability. Canberra saw a 66% increase in STR listings in the year to March 2023, the largest jump of any Australian jurisdiction. Greens MLA Johnathan Davis has called for tighter regulation, arguing these properties are being "ripped from our long-term market."

To succeed with STRs in Canberra, hosts need to understand the applicable rules and be committed to responsible hosting. Having good relationships with neighbors and promptly addressing any concerns can help avoid complaints that may trigger enforcement action.

Ultimately, ongoing dialogue between hosts, residents, and policymakers will be key to refining the STR rules to balance the economic benefits with protecting community amenity. With its strong tourism economy, Canberra looks set to remain an important test case in the broader debate over short-term rental regulation in Australia.

Short-Term Rental Licensing Requirement in Canberra

Unlike some other Australian states and territories, the ACT currently does not have a mandatory licensing or registration system for short-term rental (STR) properties. This means that hosts in Canberra are not required to obtain a specific license or register their property with the government before listing it on platforms like Airbnb.

However, there have been growing calls for the introduction of such a system to better regulate the STR industry and address concerns around housing affordability and neighborhood amenity. In March 2023, ACT Greens MLA Johnathan Davis moved a motion in the Legislative Assembly calling on the government to consider establishing a registration scheme for STR properties.

While the government did not commit to implementing a registration system immediately, it agreed to explore the option as part of a broader review of the STR sector. The review, due to be completed by the end of 2023, will also look at potential caps on the number of STR properties and limits on the days per year a property can be let out on a short-term basis.

Despite the lack of a formal licensing requirement, STR hosts in Canberra still need to ensure they are complying with other applicable laws and regulations. This includes obtaining the necessary planning approvals if required, meeting fire safety standards, and adhering to the terms of their lease agreement if renting the property.

In particular, tenants who want to list their rental property on Airbnb need to be aware of the potential legal risks. Most residential leases in the ACT prohibit subletting without the landlord's consent. The landmark Victorian Supreme Court case of Swan v Uecker found that Airbnb arrangements can be considered a lease rather than a license, meaning tenants could be in breach of their rental agreement if they list on Airbnb without permission.

There are also tax implications to consider. Any income earned from STR activities is assessable and needs to be declared to the Australian Taxation Office. Hosts may also be liable for land tax if their property is not their principal place of residence.

While the regulatory landscape for STRs in Canberra is still evolving, it's clear that hosts need to do their due diligence and understand their legal obligations before listing their property. With the ACT government set to review the sector more closely in the coming months, it's possible that a mandatory registration or licensing system could be on the horizon.

For now, prospective hosts should keep a close eye on any announcements and seek professional advice to ensure they are operating within the bounds of the law. By staying informed and taking a responsible approach, hosts can help build a sustainable and well-functioning STR market that delivers benefits for both hosts and the wider Canberra community.

Required Documents for Canberra Short-Term Rentals

While Canberra does not currently have a mandatory registration system for short-term rentals (STRs), hosts still need to ensure they have the necessary documents and approvals in place before listing their property on platforms like Airbnb.

Planning approval: Depending on the zoning of your property and the nature of your STR operation, you may need to obtain planning approval from the ACT Planning and Land Authority (ACTPLA). This is particularly relevant if you are proposing to use your property primarily for short-term accommodation rather than long-term residential use. It's best to check with ACTPLA to confirm the requirements for your specific property and circumstances.

Building approval: If you are undertaking any building works to prepare your property for STR use, such as adding an extra bathroom or creating a separate entrance, you will need to obtain building approval from a private building certifier. This ensures the works comply with relevant building codes and standards.

Insurance certificate: It's crucial to have appropriate insurance coverage in place for your STR property. This should include public liability insurance to protect you in case a guest is injured on your property. Your insurer may require you to take out a specific policy for STR use, so be sure to confirm this in writing and obtain a certificate of currency.

Fire safety statement: Under the ACT Building Act, all buildings must have an annual fire safety statement prepared by an accredited practitioner. This statement confirms that the building's fire safety measures, such as smoke alarms and fire extinguishers, have been properly maintained and are in working order. You will need to provide a copy of this statement to your guests and have it available for inspection by authorities.

Tenancy agreement: If you are currently renting the property you wish to list on Airbnb, you will need to obtain written permission from your landlord. This is typically done through a revised tenancy agreement that specifically allows for STR use. Without this approval, you could be in breach of your lease and face possible eviction.

Strata approval: If your property is part of a strata scheme, you may need approval from the owners corporation before listing it on Airbnb. Some strata schemes have by-laws that restrict or prohibit STRs, so it's important to check this first. If approval is required, you will need to provide evidence of this to Airbnb and your guests.

While not necessarily a legal requirement, it's also a good idea to have a comprehensive house manual prepared for your guests. This should include important information about the property, such as emergency contacts, wifi details, parking instructions, and any specific house rules. Having this document available can help ensure a smooth and safe stay for your guests.

By obtaining and maintaining these key documents, Canberra STR hosts can demonstrate their compliance with relevant laws and regulations. This not only helps to protect hosts legally, but also provides peace of mind for guests that the property is safe and suitable for their stay. As the regulatory landscape continues to evolve, it's important for hosts to stay informed and seek professional advice where needed.

Canberra Short-Term Rental Taxes

Short-term rental hosts in Canberra need to be aware of their tax obligations, including income tax, capital gains tax (CGT), and land tax. Any income earned from renting out your property on platforms like Airbnb is considered assessable income and must be declared on your annual tax return.

For income tax purposes, you can claim deductions for expenses related to your STR activity, such as cleaning fees, utilities, and depreciation of furniture and appliances. If you are only renting out a portion of your home, these expenses need to be apportioned based on the floor area used for rental and the time it was available.

Capital gains tax may apply when you eventually sell a property that has been used for STRs, even if it is your main residence. In Australia, the main residence is usually exempt from CGT. However, if you have rented out part or all of your home on Airbnb, you may be liable for CGT on a portion of any capital gain when you sell. The CGT is calculated based on the proportion of the floor area rented and the period used for rental income.

Land tax is another key consideration for Canberra STR hosts. In the ACT, residential properties that are rented and earning income are subject to land tax. This is payable each quarter and is calculated based on a fixed charge plus a percentage of the unimproved land value.

While land tax usually doesn't apply to a principal place of residence, renting out a portion of your home (like a granny flat) could trigger a land tax liability. A recent Victorian court case found that Airbnb arrangements can constitute a lease for the purposes of land tax legislation. This means an ACT host who rents out their property on Airbnb, even for a single night, could be liable for land tax for that entire quarter.

There are some exemptions and concessions available for land tax in certain circumstances. For example, you may be exempt if you are temporarily absent from your home for up to two years due to compelling compassionate reasons. The former home of a deceased owner is also exempt from land tax for up to two years from the date of death.

It's important to note that the ACT does not currently have a specific tax or levy on short-term accommodation bookings, unlike some other states. For example, Victoria recently introduced a 7.5% levy on STR bookings made through online platforms.

However, with the rapid growth of the STR market in Canberra, it's possible the ACT government may consider additional taxes or regulations in the future to address housing affordability concerns. The 2022-23 ACT Budget included funding for a review of the STR sector and its impacts.

STR hosts should consult with a qualified tax professional to fully understand their obligations and ensure compliance. Proper record-keeping is essential, as the ATO receives data from STR platforms and can cross-check this against tax returns. By staying on top of your taxes, you can operate your STR with confidence and avoid any surprise bills down the line.

Australia Wide Short-Term Rental Rules

While each state and territory in Australia has its own specific regulations around short-term rentals, there are some common themes and emerging trends at a national level.

One key development has been the introduction of mandatory registration schemes for short-term rental properties. Tasmania was one of the first states to implement this in 2019, requiring all properties listed on booking platforms to be registered with the government. Since then, several other jurisdictions have followed suit or announced plans to do so, including New South Wales, Western Australia, and South Australia.

The primary goals of these registration systems are to improve transparency, ensure compliance with fire safety and other standards, and assist with monitoring and enforcement of rules around short-term letting. Registration also provides valuable data to governments about the scale and distribution of short-term rental activity.

Another common regulatory approach has been the use of nightcaps to limit the number of days per year that a property can be let out on a short-term basis, particularly in areas with acute housing pressures. In New South Wales, there is a 180-day annual limit for unhosted properties in Greater Sydney and some regional areas. The Byron Shire Council in NSW has sought to go further, proposing a 90-day cap.

Caps are intended to strike a balance between supporting tourism and the economic benefits of short-term rentals while ensuring that properties are not entirely removed from the long-term rental market. However, there has been resistance from some property owners and the short-term rental industry, who argue the rules are too restrictive.

Strata laws have also been an important battleground, with different states taking contrasting approaches. In NSW, owner corporations can adopt by-laws prohibiting short-term letting in strata schemes where the property is not the host's principal place of residence. Victoria has gone the other way, with a 2016 Supreme Court decision invalidating any strata by-law that sought to restrict short-stay letting.

Looking ahead, it's likely that mandatory registration will become the norm across Australia as governments seek to get a better handle on the burgeoning short-term rental sector. Pressure is also mounting for a more coordinated and consistent national approach rather than the current patchwork of state and local government rules.

The short-term rental industry itself has recognized the need for sensible regulation. Airbnb has called for simple, state-wide registration systems along with industry-wide codes of conduct to help address community concerns while providing certainty for hosts and guests.

Ultimately, the goal of regulation should be to harness the economic opportunities presented by the sharing economy while safeguarding community amenities and access to housing. With the right balance, short-term rentals can be a win-win for tourism and residents alike. But it will require ongoing collaboration between industry, governments and communities to get the settings right.

As the short-term rental juggernaut continues to grow and evolve, a flexible and responsive regulatory framework will be key to ensuring its long-term sustainability. By learning from the experiences of different jurisdictions and engaging in constructive dialogue, Australia can develop a best-practice approach that delivers positive outcomes for all.

Does Canberra Strictly Enforce STR Rules?

Based on discussions among short-term rental hosts on forums like Bigger Pockets and Reddit, it appears that Canberra has a relatively lax approach to enforcing rules around short-term rentals compared to some other Australian cities. Many hosts report operating STRs in Canberra without major issues, even if they may not be fully compliant with all applicable regulations.

One Bigger Pockets user shared their experience running multiple STR properties in Canberra, noting that while the ACT government has made some noise about potentially tightening rules, there has been little concrete action to date. They advised that having positive relationships with neighbors and proactively managing any concerns goes a long way in avoiding complaints that could trigger enforcement.

On the Canberra subreddit, a commenter familiar with the local STR market expressed the view that Canberra is quite "Airbnb friendly" overall. They pointed to the lack of a mandatory registration system or nightcaps as evidence that the ACT government is not overly focused on cracking down on STR activity, especially compared to some other jurisdictions.

However, other posters cautioned against assuming a complete regulatory free-for-all. One Reddit user noted a recent case where an apartment building's owners' corporation successfully enforced a by-law prohibiting STRs that were not the host's principal place of residence. They suggested hosts still need to do their due diligence on any strata rules that may apply.

The general consensus seems to be that while Canberra is not the strictest city when it comes to policing STRs, hosts cannot simply ignore all rules without potential consequences. Taking a completely cavalier approach is increasingly risky as community awareness of STR impacts grows.

As one Bigger Pockets member put it, "The days of the Wild West are numbered. Hosts who want to stay in the game long-term need to get on the front foot and be proactive about compliance and working with their local community. Sticking your head in the sand and hoping for the best is not a winning strategy anymore."

So in summary, Canberra appears to be a relatively welcoming market for responsible STR hosts currently, but it's not a total regulatory vacuum. The ACT government and individual strata schemes may well tighten rules in the future as the sector matures and policy catches up. Hosts who make an effort to understand and comply with the evolving regulatory landscape will be best placed to thrive in the Canberra STR space for the long haul.

How to Start a Short-Term Rental Business in Canberra

If you're interested in starting a short-term rental business in Canberra, here are the key steps to follow:

1. Research the local STR market and regulations. Understand the demand drivers, competition, and any specific rules or restrictions that apply in the ACT. While Canberra doesn't currently have a mandatory registration system, it's important to stay informed as the regulatory landscape evolves.
2. Determine your target guest demographic and the type of property that will best suit their needs. Consider factors like location, size, amenities, and unique selling points. Proximity to key attractions, universities, and transport can be a big draw.
3. Acquire an appropriate property, either by purchasing or leasing. If leasing, check that the landlord allows sub-letting for STR purposes. If the property is part of a strata scheme, confirm that the by-laws permit STRs.
4. Set up your property for STR use. This may involve furnishing and decorating, upgrading amenities, and implementing keyless entry and other smart home features. Aim to create a space that is functional, inviting and captures the essence of your target market.
5. Obtain any necessary insurances, including public liability and landlord insurance specifically covering STR use. Proper insurance is crucial to protect yourself, your property, and your guests.
6. Create a compelling listing on popular STR platforms like Airbnb and Stayz. Craft an engaging title and description, upload high-quality photos, and set competitive rates. Be sure to highlight any unique selling points and include all relevant information for guests.
7. Establish your operational processes, including cleaning, restocking supplies, maintenance, and guest communication. You can choose to manage these aspects yourself or engage a reputable STR management service to handle the day-to-day operations.
8. Understand your tax obligations, including declaring STR income, claiming eligible deductions, and collecting/remitting any applicable taxes like GST. Consider engaging a tax professional to ensure compliance and optimize your tax position.
9. Launch and market your listing. Take advantage of the platforms' built-in promotion tools and consider additional marketing channels to drive visibility and bookings. Encourage satisfied guests to leave reviews to build your reputation.
10. Monitor your performance and adjust your strategy as needed. Regularly review your occupancy rates, revenue, guest feedback, and operational efficiency. Stay attuned to market trends and regulatory changes to remain competitive and compliant.

By following these steps and committing to providing an exceptional guest experience, you can build a successful short-term rental business in Canberra. While the STR market is dynamic and not without challenges, it offers a rewarding opportunity for savvy hosts to generate income from their property investments.

Who to Contact in Canberra about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations and zoning in Canberra, there are several key contacts and resources available:

Access Canberra - Planning and Development:

Access Canberra is the ACT Government's one-stop shop for planning, building and leasing information. Their Planning and Development team can provide guidance on zoning, Crown leases, and development applications related to short-term rentals.

Phone: 13 22 81
Email: EPDCustomerServices@act.gov.au
Website: www.accesscanberra.act.gov.au

ACT Planning and Land Authority (ACTPLA):

ACTPLA is responsible for administering the Territory Plan, which sets out the zoning rules for different areas in Canberra. They can advise on whether short-term rentals are permitted in a particular zone and any applicable development controls.

Phone: (02) 6207 1923
Email: terrplan@act.gov.au

Environment, Planning and Sustainable Development Directorate:

The ACT Government's Environment, Planning and Sustainable Development Directorate oversees planning policy and urban renewal in Canberra. They are currently reviewing the regulation of short-term rentals as part of a broader housing affordability strategy.

Phone: 13 22 81
Email: EPSDDComms@act.gov.au

Tenants' Union ACT:

The Tenants' Union is a non-profit community legal centre that provides advice and advocacy for tenants in the ACT. They can offer information on how short-term rentals may impact tenancy agreements and renters' rights.

Phone: (02) 6247 2011
Email: info@tenantsact.org.au

Strata Community Association (ACT):

For owners and residents in strata titled properties, the Strata Community Association can provide guidance on how short-term letting is regulated under ACT strata laws and individual building by-laws.

Phone: (02) 6295 9630
Email: admin@strata.community

In addition to these contacts, it's always a good idea to seek independent legal advice if you are unsure about the compliance of a particular short-term rental arrangement. A qualified lawyer with experience in ACT planning and property law can review your specific circumstances and provide tailored guidance.

As the short-term rental market continues to evolve in Canberra, it's important for hosts, guests, and the wider community to stay informed about the applicable rules and any proposed changes. By engaging with the relevant government agencies and industry bodies, stakeholders can work together to strike the right balance between supporting tourism and protecting neighborhood amenity.

What Do Airbnb Hosts in Canberra on Reddit and Bigger Pockets Think about Local Regulations?

To gauge the sentiment among short-term rental hosts in Canberra regarding local regulations, I browsed through relevant discussions on Reddit and Bigger Pockets forums. Here are some key takeaways:

On the Canberra subreddit, a thread titled "Greens politician proposes cap on the number of Airbnbs in Canberra as rental crisis continues" generated lively debate. Many commenters expressed support for density limits and time caps on STRs in residential areas, arguing that unrestricted Airbnbs contribute to housing shortages and erode neighborhood character. As one user put it, "There should be absolutely no tolerance for residential properties being used permanently and continuously for short-term lets, or mini moguls turning residential properties into hotel empires."

However, some hosts pushed back, asserting that responsible STR operators who rent out a room in their own home or only occasionally let their entire property should not be penalized. They felt that blanket restrictions fail to distinguish between "mum and dad" hosts and large commercial players.

In a separate thread titled "Has anyone rented their primary residence on Airbnb whilst away?", a prospective host sought advice on listing their Canberra home while traveling. Respondents cautioned that while it's feasible, hosts need to be aware of tax implications, insurance requirements, and potential impacts on the property. One commenter noted, "Remember, 20-30% of REVENUE equates to about 50% of the profit but with none of the risks/void months. There is, however, an expectation that you understand the market and the needs of hosts/guests before offering the service to someone else."

On Bigger Pockets, a popular real estate investing forum, a host shared their experience navigating Canberra's zoning laws and unit title rules. They advised that hosts should seek legal advice to ensure their STR plans comply with the permitted uses for their specific property, as breaching these rules can lead to significant penalties. The host also emphasized the importance of maintaining positive relationships with neighbors and the owners' corporation to avoid complaints.

Another Bigger Pockets thread delved into the profitability of Airbnb hosting. A Canberra host reported that while their gross rental income was substantial at around $25k per year, expenses like maintenance, utilities, and supplies whittled their net profit down to just $10k before tax. Other hosts chimed in with tips to optimize revenue and control costs, such as offering longer stays to reduce turnover and to invest in amenities that justify higher nightly rates.

Overall, the online discussions paint a picture of Canberra hosts who are keen to capitalize on the STR opportunity but are increasingly cognizant of the regulatory risks and community pushback. Many seem to favor a balanced approach where responsible hosting is allowed within reasonable limits, but there are concerns that overly restrictive policies could disadvantage "amateur" hosts compared to large operators. As the ACT government reviews the rules for STRs, hosts will be closely watching to see where the chips fall.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.