Home Property Australia NSW Government Announces Plan for Short-Term Holiday Letting

NSW Government Announces Plan for Short-Term Holiday Letting

  • June 27, 2018

NSW Government Announces Plan for Short-Term Holiday Letting

On June 5, the NSW Government announced their regulation plan for the short-term holiday letting industry.

This state regulation initiative began over two years ago when the Government held a Parliamentary Inquiry to examine the industry. 

This proposed reform limits short-term letting for a maximum of 180 days in Greater Sydney when the host is not present, with no such limitations in place outside Greater Sydney. There are also changes to the Strata Schemes Management Act, which will allow owners’ corporations to adopt a by-law, with a 75 per cent majority vote, to prevent short-term letting in their block if the host doesn’t reside in that unit. And finally, the NSW Government announced the implementation of a mandatory Code of Conduct to regulate the behaviour of visitors residing in these temporary residencies. 

Short-term holiday letting has been loosely defined as an owner renting out whole or part of their private dwelling to a visitor on a commercial basis, whether that owner is present or not. 

Before this Government initiative, the only source of regulation on the industry came from the planning systems of local government areas. Councils had the ability to certify controls around land use for short-term holiday letting through their Local Environment Plans (LEP). But few LEPs in New South Wales referred specifically to short-term holiday letting. And the LEPs that did address short-term holiday letting used divergent definitions and thresholds for when the industry required development consent. 

The NSW Government Package with Planning and Fair-Trading reforms include:

  • Allowing short-term holiday letting as exempt development 365 days per year when the host is present;

  • When the host is not present, a limit for hosts to rent out properties via short-term holiday letting of 180 days in Greater Sydney, with 365 days allowed in all other areas of New South Wales;

  • Councils outside Greater Sydney having the power to decrease the 365-day threshold to no lower than 180 days per year; and

  • Owners Corporations will be able to adopt a by-law, with 75 per cent majority, to prevent short-term letting in their block if the host does not live in the unit they are letting out.

The Government also plans to implement a mandatory Code of Conduct to address impacts like noise level, disruptive guests and the effects on shared neighbourhood amenities. This would also include the introduction of a new dispute resolution process. It has been proposed to implement a ‘two strikes and you’re out’ policy for any violators of the Code.

The Property Council of Australia will continue to liaise with the Government to obtain the full details of this package and ensure that full consultation occurs for the proposed legislative changes and the drafting of the mandatory Code of Conduct.