The Minns government is facing mounting pressure to introduce a dedicated levy on short-term holiday rentals to fund an urgent expansion of social and affordable housing across New South Wales.
The community housing industry peak body has presented a package of reform measures to state policymakers, arguing that taxing platforms such as Airbnb and Stayz could unlock a sustained revenue stream to build desperately needed dwellings, ABC News NSW reported.
Funding pipeline for affordable homes
Community housing providers, which construct and manage subsidised accommodation for lower-income households, maintain that existing government funding arrangements fail to match the sheer scale of the state's housing deficit. Under the proposed blueprint, proceeds generated from a dedicated short-stay surcharge would be ring-fenced to underwrite capital subsidies, enabling not-for-profit developers to secure private finance and accelerate construction timetables.
Sector advocates argue that the mechanism would simultaneously tackle two fronts of the housing emergency: tempering the rapid conversion of permanent residential leases into high-turnover holiday accommodation while bankrolling permanent, high-density social dwellings.
Pressure mounts to emulate southern model
The policy blueprint draws direct inspiration from south of the border. Victoria has legislated a 7.5 per cent levy on consumer bookings across short-stay platforms, due to commence in 2025, with revenues hypothecated into Homes Victoria to build and maintain community and public housing assets.
ABC News NSW reported that advocates consider the Victorian framework an established, workable precedent for New South Wales. While the Minns government completed a review into the state's short-term rental regulatory framework earlier this year, it has yet to commit to a broad platform tax, preferring instead to assess council-specific regulatory options.
Regional communities at breaking point
The debate carries particular urgency outside the capital, where regional economies are grappling with severe rental vacancy rates. In coastal and lifestyle enclaves such as the Byron Shire, the Illawarra, and the Sapphire Coast, nurses, teachers, and hospitality staff have increasingly been priced out of local rental markets.
While local councils have experimented with caps on unhosted holiday rentals, peak housing groups say regulatory limits alone do not generate new homes. A dedicated platform levy, proponents argue, would ensure that the commercial windfalls generated by the sharing economy are redirected back into local community infrastructure.
Broader blueprint for state supply
The proposed levy forms part of a wider policy submission to the state government as it grapples with its obligations under the National Housing Accord. New South Wales must deliver hundreds of thousands of well-located homes before the end of the decade, yet community providers caution that private developers cannot resolve the shortfall in sub-market housing on their own.
Beyond the holiday rental tax, the sector's recommendations call for long-term leases on surplus Crown land, expedited rezoning pathways for non-profit providers, and standardised affordable housing contributions across all major metropolitan developments.