Is the new NSW Government
policy a win-win for short-term (Airbnb style) holiday
At long last, the NSW Government has announced its policy
for short-term holiday letting. It is a compromise policy,
encouraging short stay holiday rentals but regulating it by
a strict code of conduct.
The NSW Minister for Better Regulation Matt Kean said: “The
Government’s short-term holiday letting plan will support
the sharing economy and give consumers more choice while
cracking down on bad behaviour”. This is the policy:
When the host is present, allowing short-term holiday
letting as exempt development 365 days per year (i.e. no
Council approval required);
When the host is not present (i.e. investment
properties), limiting short-term holiday letting to 180
days per year in Greater Sydney, and outside Greater
Sydney as allowed by Council from 180 days to 365 days
Owners Corporations in strata title schemes will be
allowed to adopt a by-law, with a 75 per cent majority,
preventing short-term letting in their block if the host
does not live in the unit they are letting out;
A mandatory Code of Conduct for online accommodation
platforms, letting agents, hosts and guests to address
impacts like noise levels, disruptive guests and effects
on shared neighbourhood amenities.
The full announcement by the Minister for Innovation and
Better Regulation Matt Kean MP is: Short-term holiday
letting plan a win-win (5 June 2018)
The 180 day limit
First and foremost, a host who ‘rents out a spare room’ to
guests who stay for holidays or business can do so all year
round, so long as they live on the premises. No Local
Council Approval will be required (i.e. it is an exempt
development), except in bushfire zones.
There will be limits on the number of rooms, and also where
the host operates a business, such as bed and breakfast
accommodation, which will be determined. But not even a
Strata Scheme will be able to prevent an owner-occupier from
renting out spare rooms in their apartment!
The 180 day limit applies to renting out whole houses, home
units, villas, and in fact any residential property, without
Local Council Approval.
The Minister’s explanation is: “The 180 days a year limit
approximately equates to weekends, school holidays and
public holidays so we felt this was a fair and balanced
In practice, with a 25% vacancy rate, a whole property could
be advertised for short-term letting 240 days of the year,
so long as the booked days are limited to 180.
Questions and comments on the
180 day limit
The 180 day limit raises five questions and some comments:
Q1 Who will police the 180 day limit? It is proposed
that NSW Fair Trading will have powers to police online
platforms and letting agents. Presumably, it will have the
power to obtain rental records from Airbnb and HomeAway
(formerly Stayz) and holiday rental agents upon receiving
complaints from ‘concerned neighbours’.
Q2 Where is the Greater Sydney Region? According to
the Greater Sydney Region Plan which was released on 23
March 2018, the metropolis is bounded by the Hawkesbury
River to the north, the Blue Mountains to the west and to
the south the Bargo/Appin region south of Campbelltown. The
exact boundary remains to be determined.
Q3 Will short-term holiday hosts be required to register?
Japan has recently adopted a 180 days limit coupled with the
mandatory registration of all short-term holiday letting
places – online platforms are co-operating by not allowing
listings without a registration number. The NSW policy will
not require registration.
Q4 When does the 180 day limit start? All we have is
an announcement. New laws will be needed. They will have a
start date and presumably set the limit of 180 days over a
calendar year – 1 January to 31 December.
Q5 Will the online platform keep count of visitor nights?
The Airbnb booking platform not only keeps count, but
will automatically manage bookings so as not to exceed the
limit. Of course, this does not apply where more than one
booking platform is used.
NSW and Japan will have a 180 day cap, which is the longest
time limit adopted for short stay holidays around the world,
in places where they are limited.
The number of days, owner in residence and other
restrictions vary around the world.
For instance: in New York, the host must be present for
lettings of less than 30 days; in Chicago, it is limited by
district, but not by days; in San Francisco (the home of
Airbnb), it is limited to 90 days where the host is not
present; Paris has a 120 day limit for short-term letting
but no registration; London has a 90 day limit, and
Amsterdam a 60 day limit for ‘entire place’ short term
rentals; Singapore is proposing a 90 day limit, licensing
and guest registration.
Limiting short stay rentals
in strata title schemes
Some strata title schemes located in beachside suburbs, in
suburbs with good transport and eating places, and in around
business districts where there is a high demand for short
stay rentals wish to ban stop short stay rentals from their
buildings because of the noise, the over-use of common
facilities and disturbance they can cause.
The new policy will allow strata title schemes to outlaw
short stay rentals, that is, for a term of less than 90
days, of a whole apartment.
The new policy will not allow strata title schemes to ban
owner-occupiers from renting out rooms in their apartment
for short stays.
Presumably, strata title schemes which have already adopted
by-laws for short-term letting will be required to submit
them to a new general meeting, to be passed with a 75%
majority (of those present and voting).
The Code of Conduct
The online platforms already use the Holiday and Short
Term Rental Code of Conduct developed by the Holiday
Rental Industry Association, which was adopted nationally in
2015. It will become mandatory for online platforms, letting
agents, hosts and guests.
The proposal is to give the Code ‘teeth’ to win political
support from neighbours, particularly in strata residents.
In his announcement, the Minister said:
“Under our ‘two strikes and you’re out’ policy, hosts or
guests who commit two serious breaches of the Code within
two years will be banned for five, and be listed on an
“These are the toughest laws in the country and will make
sure residents are protected while ensuring that hosts who
do the right thing are not penalised.”
The NSW Government will introduce a new dispute resolution
process to resolve complaints, administered by NSW Fair
Trading, as opposed to the Local Councils dealing with
Short-term letting hosts can breathe easy, provided their
guests don’t upset the neighbours.
The Minister emphasised that “the reforms recognise
the estimated $31 billion annual contribution of online
booking platforms to the Australian economy”.
Airbnb welcomed the new NSW Government policy – “The rules
will be a boost to the NSW economy and a welcome relief for
the countless small, local businesses who rely on the Airbnb
guest dollar”; and “we’re generating $3,700 a year for a
typical host in Sydney, we have 55,000 listings in this area
generating economic benefit to people and that money is
Boutique hotels, B & B s and serviced apartments will
benefit from this policy. With Council Approval to operate
all year round, they will continue to use online platforms
as a cheap distribution channel to sell hotel rooms: Airbnb
and Homestay charge a 3% commission to hosts as opposed to
Online Travel Agents (OTAs) which charge up to 25%
Strata Title Schemes will be able to vote to ban short stay
rentals of whole apartments. And neighbours will be able to
complain about breaches of the Code of Conduct.
So, it’s a win-win for all.