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

What are Short-Term Rental (Airbnb, VRBO) Regulations in Perth, Australia?

In recent years, short-term rentals through platforms like Airbnb and VRBO have become increasingly popular in Perth, Australia. However, hosts need to be aware of the various regulations and requirements around operating a short-term rental business in Perth. This article summarizes the key rules and policies to know.

Starting a Short-Term Rental Business in Perth

To legally operate a short-term rental (STR) in Perth, hosts need to:

• Register their property with the state government's new Short-Term Rental Accommodation (STRA) register, which is expected to open in mid-2024. All STRs will need to be registered by January 1, 2025.
• Obtain development approval from their local council if renting out an entire property (un-hosted) for more than 90 days per year in the Perth metropolitan area. Hosted STRs where the host lives on-site are exempt from requiring development approval.
• Comply with fire safety standards, provide a fire evacuation plan, and ensure adequate safety measures like smoke alarms and fire extinguishers are in place.
• Collect and remit the appropriate taxes, which may include income tax, GST, and local tourism levies. The ATO requires STR income to be declared.
• Adhere to the state-wide STRA Code of Conduct and any additional requirements set by their local council, such as maximum occupancy limits, parking provisions, and noise restrictions.

Failure to comply with the legal obligations can result in significant fines. However, the regulations are not always consistently enforced. As one Redditor noted: "Airbnb Rental Arbitrage may be illegal in New South Wales depending on local government zoning [and bylaws], which can impose restrictions on short-term letting, but in practice, it seems to happen a lot in Sydney."

Short-Term Rental Licensing Requirement in Perth

As part of the new short-term rental accommodation (STRA) regulations being implemented in Western Australia, all STRA properties will need to be registered through a mandatory state-wide registration system by January 1, 2025.

The STRA register is expected to open in mid-2024. Once operational, STRA operators must register their property and obtain a unique registration number before advertising their property or accepting bookings on platforms like Airbnb.

The registration requirement applies to all STRA properties, regardless of whether:

1. The property is hosted (owner lives on-site) or un-hosted (guests have exclusive use)
2. The property requires development approval from the local council
3. The property is currently exempt from requiring development approval

Registering will provide the WA government with important data to inform strategic planning around housing, development, and tourism opportunities. It will also give local councils and communities more visibility into STRA properties operating in their area.

Failing to register a STRA property by the deadline may result in penalties. The registration process will require operators to declare details about their property, including:

1. Proof of ownership or the right to use the property as STRA
2. Whether the property is part of a strata scheme and complies with any applicable by-laws
3. Confirmation the property meets fire and safety requirements
4. Details on the maximum number of occupants the property sleeps

Once registered, the unique registration number must be included in any listing or advertisement for the property. Operators will have until January 1, 2026, to provide evidence that their property complies with any local planning requirements to remain registered.

The registration requirement is one component of the new STRA regulatory framework, and it also includes changes to planning and development approval processes. In the Perth metro area, un-hosted STRA properties rented out for more than 90 days per year will require development approval from the relevant local council. Hosted STRA properties are exempt from requiring development approval.

Required Documents for Perth Short-Term Rentals

To legally launch and operate a short-term rental in Perth, hosts will need to provide certain documentation when registering their property with the state-wide STRA register. This includes:

1. Proof of identity, such as a driver's license or passport, to verify property ownership or the right to use the property as a short-term rental.
2. Evidence the property meets fire and safety requirements, such as smoke alarms, fire extinguishers, and an evacuation plan. An inspection report from a licensed professional may be required.
3. If the property is part of a strata scheme, written approval from the strata company or a copy of the strata by-laws confirming short-term rentals are permitted. Many strata corporations restrict or prohibit short-stay letting.
4. For un-hosted rentals operating more than 90 days per year in the Perth metro area, a copy of the development approval from the local council. This is not required for hosted rentals or un-hosted rentals under the 90-day threshold.
5. Details on the maximum number of guests the property can accommodate to ensure compliance with occupancy limits. This may be confirmed by a floor plan.
6. Nomination of an emergency contact who can respond to any issues at the property within a reasonable timeframe. For hosted rentals, this is usually the owner living on-site.

Hosts will have until January 1, 2026, to provide evidence that their property complies with the relevant planning requirements to remain registered. Local councils may request additional documentation for un-hosted STRA operating over 90 days as part of their approval process.

Failing to provide the required information or making false declarations during the registration process can result in significant penalties, including fines and cancellation of the registration. The state government has indicated compliance monitoring and enforcement will be a priority under the new STRA framework.

It's important for hosts to carefully review what documents they need to provide and engage with their local council early if development approval is required for their rental property. Having all the necessary paperwork in order will help ensure a smooth registration process and avoid any disruptions to their STRA business.

Perth Short-Term Rental Taxes

Short-term rental hosts in Perth need to be aware of their tax obligations on the income they earn through platforms like Airbnb. The Australian Tax Office (ATO) considers this rental income part of the host's taxable income.

As a general rule, GST does not apply to residential rents, so Airbnb hosts do not have to charge or remit GST, even if their annual revenue exceeds the $75,000 GST threshold. However, hosts are still required to declare their rental income on their annual tax return and pay income tax at their marginal rate.

Some common expenses that hosts can deduct to reduce their taxable rental income include:

1. Airbnb service fees
2. Cleaning fees and maintenance costs
3. Utilities like electricity and internet, if not paid by the guest
4. Depreciation on furniture and appliances used in the rental
5. Mortgage interest (but not principal repayments)
6. Council rates and land taxes
7. Insurance premiums
8. Photography for the listing
9. Supplies provided to guests, like toiletries and coffee

If only a portion of the property is rented out, for example, a room in the host's primary residence, then expenses need to be apportioned accordingly. Hosts should keep detailed records throughout the year to substantiate expense claims.

It's important to note that renting out part or all of a property can impact the host's eligibility for the capital gains tax (CGT) main residence exemption when the property is later sold. A partial exemption may apply based on the proportion of the property rented out and the time used for rental vs personal use. Hosts should consult a tax professional to calculate any CGT liability.

Unlike some other Australian states, Western Australia has not announced any new taxes specifically targeting short-term rentals as of May 2024. Instead, the WA government is focusing on a mandatory registration system and changes to planning approvals to regulate the industry.

However, as the short-term rental market matures, it's possible additional taxes may be introduced in the future to level the playing field with traditional accommodation providers and generate revenue for affordable housing initiatives. Hosts should stay informed of any regulatory changes that could impact their STR business.

Australia Wide Short-Term Rental Rules

While short-term rental regulations are primarily governed at the state and local council level in Australia, hosts need to be aware of some nation-wide rules.

Taxation

The Australian Taxation Office (ATO) considers any income earned from short-term rental platforms like Airbnb or Stayz to be taxable income. This is the case regardless of whether the property is the host's main residence or an investment property.

Hosts must declare their rental income on their annual tax return and pay income tax at their marginal rate. They can claim tax deductions for associated expenses like:

1. Airbnb/platform hosting fees
2. Cleaning and maintenance costs
3. Utilities
4. Mortgage interest (not principal repayments)
5. Property management fees
6. Depreciation on furniture and appliances

Goods and Services Tax (GST) generally does not apply to residential rent. However, if the host is running it as a business and their annual turnover exceeds $75,000, they may need to register for and charge GST.

Strata Regulations

There are additional considerations around short-term rentals for properties that are part of a strata or community title scheme. Most state strata laws prohibit by-laws that outright ban short-term letting. However, owners of corporations can adopt by-laws that reasonably restrict short-stays, such as:

1. Limiting the number of nights per year, the lot can be used for short-stays
2. Requiring hosts to hold specific insurance
3. Mandating that guests are provided with by-laws and code of conduct
4. Allowing the owners corporation to recover costs for dealing with guest misbehavior

Hosts need to carefully review their strata by-laws and obtain any necessary approvals before listing their property for short-stays.

Discrimination Laws

Under the federal Disability Discrimination Act, short-term rental hosts cannot discriminate against guests with disabilities by refusing them accommodation or providing inferior conditions. Hosts may need to make reasonable adjustments to ensure their property is accessible.

The Age Discrimination Act prohibits hosts from imposing any age-based restrictions or minimum age requirements for guests, except for properties in Queensland.

Hosts also cannot unlawfully refuse accommodation to someone based on their race, gender, sexuality, or other protected attributes under federal and state anti-discrimination laws.

While the specific short-term rental laws vary across Australia, hosts should ensure they understand and comply with their taxation, strata, and anti-discrimination obligations at a national level. Violating these rules can result in penalties, fines, or legal action.

Does Perth Strictly Enforce STR Rules?

Based on discussions on forums like BiggerPockets and Reddit, it appears that while Perth has implemented new regulations around short-term rentals (STRs) like Airbnb, enforcement has been somewhat lax compared to other major Australian cities.

On the BiggerPockets forum, several investors report continuing to operate STRs in Perth without facing significant issues from local councils, despite the new registration requirements and restrictions on un-hosted rentals over 90 days.

One user commented: "I've had a few Airbnb properties in Perth for years and haven't faced any real crackdown from the council, even after the new laws came in. As long as you don't have problem guests causing issues, they seem to turn a blind eye."

Similarly, a thread on the Perth sub-reddit saw users discussing the prevalence of Airbnb listings that appear to violate the 90-day un-hosted cap and lack of enforcement. As one Redditor put it: "Plenty of investors are running semi-legal Airbnb operations in Perth. The councils know it's happening but don't have the resources to properly police it all."

However, hosts do seem to acknowledge that Perth is taking a stricter stance than it was in the past. Requiring registration, the ability for councils to limit nights per year, and the risk of fines is making some investors cautious about scaling up their Airbnb businesses in Perth.

"I'm holding off on buying more STR properties in Perth for now. The new rules are fairly toothless at the moment, but I could see them really cracking down in a few years once it's fully rolled out," noted a BiggerPockets user.

Overall, while Perth may not be as draconian as some East Coast cities in enforcing short-term rental laws currently, the regulatory environment is clearly tightening. Investors are divided on whether Perth will remain an Airbnb-friendly market long-term or if hosts will face escalating challenges in coming years as councils get more resources and data to identify non-compliant rentals.

How to Start a Short-Term Rental Business in Perth

1. Research the local regulations and obtain necessary approvals. In Perth, you need to register your property with the state government's Short-Term Rental Accommodation (STRA) register once it opens in mid-2024. If renting out an entire un-hosted property for over 90 nights per year, you'll also require development approval from your local council.
2. Prepare your property to meet requirements. Ensure your rental complies with fire safety standards like smoke alarms and extinguishers. Provide an evacuation plan. If part of a strata, get approval from the strata company to operate a short-term rental.
3. Determine which platforms to list on. The major short-term rental sites are Airbnb, Vrbo, and Booking.com. Consider listing across multiple platforms to maximize visibility.
4. Create an attractive listing with high-quality photos and detailed descriptions highlighting your property's amenities, location, and house rules.
5. Set competitive pricing using dynamic pricing tools and data on comparable rentals in your area. Factor in costs like cleaning fees, taxes, and platform service fees.
6. Establish systems for guest communication, cleaning, maintenance, key exchanges, and any other services you'll provide or outsource to third-parties.
7. Obtain appropriate insurance coverage for short-term rentals, such as public liability, property damage by guests, and income protection.
8. Once your STRA registration is approved, include the unique number in all advertising for your rental property, as required by law.
9. Market your listing through optimized titles, descriptions, and by encouraging positive reviews from guests to improve rankings.
10. Stay compliant by collecting and remitting taxes, following zoning rules like maximum occupancies, parking, and noise, and keeping your STRA registration up-to-date.

The short-term rental market can be lucrative but also comes with significant responsibilities as an operator. Taking the proper steps upfront to meet all legal obligations will help ensure a smooth experience hosting guests in Perth.

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

If you have questions or need more information about short-term rental regulations and zoning requirements in Perth, here are the main contacts:

1. City of Perth

For questions about operating a short-term rental within the City of Perth local government area, you can contact their planning and development team:

Planning and Development

Phone: (08) 9461 3366
Email: planning@cityofperth.wa.gov.au

2. Town of Victoria Park

This neighboring council also has its own short-term rental rules and registration process:

Town of Victoria Park Planning Services

Phone: (08) 9311 8111
Email: admin@vicpark.wa.gov.au

3. Western Australian State Government

The state government's Department of Planning, Lands and Heritage oversees the new state-wide registration system for short-term rentals:

Department of Planning, Lands and Heritage

Phone: (08) 6551 9919
Email: stra@dplh.wa.gov.au

You can also contact the local government about the area in which your potential short-term rental property is located. All councils will have planning and development staff who can advise on their specific short-term rental policies, zoning restrictions, approval requirements, and registration process.

It's recommended to get in touch with the relevant authorities early when considering starting a short-term rental business. The regulations around issues like hosting permits, safety compliance, zoning, and taxes can be complex. Having the proper guidance and approvals in place from the start is crucial for hosts.

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

On the Perth subreddit, there has been an active discussion around the state government's new short-term rental regulations. Many hosts have expressed frustration at the additional requirements and restrictions:

"I've had Airbnb properties in Perth for years, and the councils have never really enforced anything. Now they're bringing in all these new rules around registration, development approvals, and safety standards. It's a lot of hoops to jump through just to keep operating."

"The 90-day cap on un-hosted rentals is going to kill my Airbnb business model. I specifically bought properties to run as full-time vacation rentals, not regular long-term rentals. Hopefully, they'll at least grandfather in existing operators."

"Between the new registration system, potential council approval requirements, and having to provide all this documentation, it feels like the government is trying to squeeze Airbnb hosts out. We're already paying income tax and GST on the revenue."

However, some hosts on Reddit seem resigned to the fact that more regulation of the short-term rental industry was inevitable as it has grown rapidly in Perth and other cities. A few comments acknowledged the rental housing crisis as the likely driver behind the new rules.

Over on the Bigger Pockets real estate forum, the view among investors operating short-term rentals in Perth is somewhat more optimistic. While they agree the regulatory compliance burden is increasing, many see it as simply the cost of doing business:

"I'm not thrilled about having to pay registration fees and jump through hoops, but that's the price to keep my Airbnb cash flow coming in. Once you factor in the nightly rates, the returns are still way higher than long-term rentals."

"The new statewide registration actually gives operators more legitimacy. Those of us doing it properly and paying our taxes don't mind increased regulation if it gets rid of the unpermitted, non-compliant hosts."

"I'm just hoping they don't make the rules too restrictive. A 60 or 90-day annual cap would be manageable, but an outright ban on un-hosted rentals would be devastating for my Airbnb business."

Overall, while there is some pushback from hosts unhappy with the increased red tape, many Perth investors operating short-term rentals seem to be taking a pragmatic approach. As long as they can still run a profitable Airbnb business by complying with reasonable regulations, they appear willing to follow the new rules, at least for now.

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.