Details on what the levy applies to and how it is calculated.
How do I calculate the levy?
The short stay levy is 7.5% of the total booking fee (i.e. the total amount paid for the stay).
The total booking fee includes charges such as cleaning fees and GST payable for any component of the booking. It does not include amounts charged for using a particular payment method, such as credit card surcharge fees.
Where one all-inclusive fee is charged to a guest, the short stay levy is calculated on that fee.
Where the fee charged to the guest is itemised (such as a separate cleaning fee, booking fee, GST for any component of the booking fee, and the short stay levy), the short stay levy is calculated on the sum of the itemised amounts.
Where the short stay levy amount is not a multiple of 5 cents, it must be rounded down to the nearest multiple of 5 cents.
Example 1
Enrique uses a booking platform to book a 2-night stay at a home in Torquay. The platform itemises the fee:
| Item | Fee |
|---|---|
| Accommodation – $500 per night | $1,000 |
| Cleaning fee | $100 |
| Guest service fee | $150 |
| GST (on cleaning fees) | $10 |
| Levy contribution requested by provider | $94.50 |
| Total (i.e. total booking fee) | $1,354.50 |
| Short stay levy (7.5% of total booking fee) | $101.55 |
The short stay levy is payable on the total booking fee. The total booking fee is the total amount that is payable for the booking (except any payment processing fees such as a credit card fee). Where a provider itemises an invoice, the total booking fee is the total of all itemised amounts. Importantly, this includes any amount attributed to the levy. This ensures the levy amount required to be remitted to the SRO is the same for an itemised invoice when compared to a non-itemised invoice.
Example of the same booking as above but without an itemised invoice:
| Item | Fee |
|---|---|
| Total fee for stay | $1,345.50 |
| Total booking fee | $1,354.50 |
| Short stay levy (7.5% of total booking fee) | $101.55 |
Once the short stay is completed, the booking platform is liable for the short stay levy. The levy is calculated as 7.5% of $1,354.50, being $101.55 (rounded down from $101.59). The booking platform must include $101.55 in respect of this stay in its return to the State Revenue Office.
Example 2
Sandy books a 3-night stay at a cottage in Ballarat directly with the owner after seeing an advertisement on social media.
The total booking fee is $950, plus a credit card surcharge of $9.50. The total amount Sandy pays is $959.50. The owner has not separately itemised the short stay levy in the amount charged to Sandy.
Once the short stay is completed, the owner is liable for the short stay levy. The levy is calculated as 7.5% of $950 (as the credit card surcharge is excluded), being $71.25. The owner must include this amount as part of their return to the State Revenue Office.
Example 3
Rohit uses a travel agency to book a 2-night stay at a tiny home in Warburton. The agency charges:
| Item | Fee |
|---|---|
| Accommodation – $300 per night | $600 |
| Cleaning fee | $55 |
| Guest service fee | $75 |
| Payment processing fee | $50 |
| Total | $780 |
The total amount Rohit pays is $780. When making payment, Rohit uses a $500 credit he received from a previous cancellation, and pays the rest with cash. As the payment processing fee is imposed by the travel agency, rather than a charge for using a particular payment method, it is included in the total booking fee of $780. There are no additional payment method fees for this booking.
Once the short stay is completed, the agency is liable for the short stay levy. The levy is calculated as 7.5% of $780, being $58.50. This amount must be included in the travel agency’s return to the State Revenue Office.
When a booking is cancelled, the levy does not apply to amounts provided as a credit or amounts which have been waived or refunded. But when a guest uses a credit to pay for a short stay – like Rohit’s $500 credit in this example – the credit is treated the same as a cash or credit card payment.
Does the levy apply on top of GST?
Yes. As the total booking fee specifically includes “any amount included in respect of GST” paid for a short stay, the short stay levy is payable on any GST amounts included in the total booking fee.
Will GST apply to the levy itself?
Division 81 of the A New Taxation System (Goods and Service Tax) Act 1999 (GST Act) outlines the treatment of Australian taxes (which is defined to include levies imposed under State law) imposed by Australian government agencies (which is defined to include a State or an authority of a State).
Broadly, the payment of Australian tax imposed by an Australian Government Agency is exempt from GST. While the GST Act allows a regulation to be made to treat certain Australian taxes as being subject to GST, there are no current regulations which have been made to treat any Australian taxes as being subject to GST.
As GST is collected by the ATO pursuant to Commonwealth law, the State Revenue Office is unable to advise whether GST applies to the levy in your particular circumstances.
Further information on the GST treatment of taxes, fees and charges can be found on the ATO website.
Is the levy imposed on late checkout fees?
The levy is calculated on the total amount payable for a short stay. This is known as the total booking fee and includes any fees charged for a late checkout.
Accordingly, when completing a return, any amount paid towards a late checkout fee should be included in the amount declared as the total booking fee for the stay.
Is the levy imposed when there is no fee for the booking?
The short stay levy is imposed on the total booking fee payable for a short stay. If nothing is paid for the stay (i.e. an owner of a holiday home permits a friend to stay without charge), then the stay is not subject to the levy.
However, if the guest is required to make a payment in connection with the stay, even if this is just a reimbursement for costs such as cleaning fees or utility costs, these payments are considered a booking fee, and the levy is payable on the total amount for the stay.
Example
David lets his cousin stay at his beachfront holiday home for 2 weeks over the summer. David does not charge his cousin for use of the accommodation. However, David has a cleaner who he regularly engages to clean the home after stays at the home. The cleaner charges $200 per clean. If David asks his cousin to reimburse him for the cleaning fee, this is considered a booking fee and a levy of $15 is payable for the stay ($200 × 7.5%).
Is the levy imposed on a gifted short stay?
The short stay levy is imposed on the total booking fee payable for a short stay. If there is no fee payable because the stay is part of a promotion or part of a voucher gifted by the controller of the accommodation, then the stay is not subject to the levy.
In contrast, if a voucher is purchased and then gifted to another person who uses the voucher to pay for a short stay then the stay could be subject to the levy. The amount that was paid through the voucher is considered part of the booking fee for the stay.
Example
Bill's Bed and Breakfast in Red Hill gifts 3 midweek stays to a charitable organisation. No fee is received for the vouchers. One such voucher is donated to Dana, who uses it to book a stay at Bill's Bed and Breakfast. Bill does not charge any extra fees for the stay. The stay is not subject to the levy.
Is the purchase of vouchers subject to the levy?
The liability for the levy arises on completion of a short stay. Therefore, the purchase of a voucher is not subject to the levy. When a voucher is used to pay a booking fee for a short stay, this forms part of the total booking fee.
Once the stay is complete, a liability for the levy will arise. The liability will be calculated based on the total booking fee, which includes any amounts paid using the voucher and any other payments.
Where a renter is charged a fee for damage caused, is this subject to the levy?
The levy is imposed on the total booking fee for a short stay. Where a guest is charged a fee for damage caused to a property, this is not a fee charged for the stay, but is a charge to repair/restore the property to its original condition. Such amounts are not considered part of the total booking fee and therefore are not subject to the levy.
Are add-ons included in the total booking fee?
Charges for items which do not directly relate to the use of property as short stay accommodation may be excluded from your calculation of the levy, depending on how the item is charged.
Where there is a genuine option not to pay for the extra service (such as transportation from the airport), the amount paid for that component should not be included in the total booking fee and is therefore not subject to the levy.
Where the extra service is part of the accommodation booking and cannot be foregone by the guest for a cheaper rate (such as the use of a boat/bike at the property), the total paid is considered the total booking fee for the purpose of calculating the levy.
How is the levy calculated with package/bundle deals?
If short stay accommodation is booked as part of a bundle or package with other items that are not connected to the use of the accommodation, such as flights, a spa treatment or restaurant experience, the levy only applies to the cost of the accommodation component of the booking.
This is the total amount paid for the accommodation by the bundle provider, or if this is not possible, a calculation of what the accommodation would have cost without the other items.
