Byron Shire enforces 60-day holiday rental cap to address housing crisis

[Mantis]

From 23 September, Byron Shire became the first community in NSW with a legally enforceable way to regulate holiday letting beyond state-imposed caps. After a decade of campaigning, un-hosted Short Term Rental Accommodation (STRA) in most of the Shire is now capped at 60 days per year.

Tamara Smith MP, Member for Ballina, emphasised the community’s efforts since 2015 to manage the impact of holiday letting. At peak times, thousands of homes were listed for holiday rentals, reducing availability for long-term residents. The cap is expected to transfer some properties back to the long-term rental market, offering relief to the housing crisis in the area.

Ms Smith acknowledged that large corporations may resist this change, but the community is hopeful the initiative will succeed in restoring balance between holiday letting and housing for permanent residents. Although Byron Shire rents are high, increasing the long-term rental supply should help both costs and availability over time.

The cap will not apply to two areas in Byron Bay and Brunswick Heads, but Ms Smith hopes this model will set a precedent for other NSW communities to regain control over STRA and prioritise housing for locals. She plans to monitor the situation closely to refine the approach as necessary.

https://greens.org.au/nsw/news/media-release/60-day-cap-kicks-today-byron-shire

[Mantis]

It will be interesting to see the results of this change. If it's successful, I'd personally like to see this implemented on a much larger scale.

[purpleduck]

I don’t know enough about it all, but if the owner makes more with short term  accommodation in 60 days than a regular long term lease, will this actually make a difference?

[Mantis]

Hmm, yes that's a fair point. I think the cap could make a difference if the income from short-term letting under the 60-day limit becomes less attractive compared to the more stable income from long-term rentals.

But it would depend on how rental prices evolve, market demand - and how strictly the regulations are enforced. Some owners may decide it's no longer worth the hassle of STRA and opt to return properties to the long-term rental market, ideally.

[LemonMyrtle]

1 minute ago, purpleduck said:

I don’t know enough about it all, but if the owner makes more with short term  accommodation in 60 days than a regular long term lease, will this actually make a difference?

My thoughts too. I can’t see how this will help since they make most their money at peak season and often leave the place empty at other times anyway. Maybe it’s less of a tax write off when the maximum you can claim is 60 days worth? That might affect massively negatively geared properties. 

[Bornagirl]

35 minutes ago, LemonMyrtle said:

My thoughts too. I can’t see how this will help since they make most their money at peak season and often leave the place empty at other times anyway. Maybe it’s less of a tax write off when the maximum you can claim is 60 days worth? That might affect massively negatively geared properties. 

Yes it will. In order for the ‘vacant’ time to be included in your costs it has to be available for letting. You would have to declare total income, but could only claim 2/12 of the costs. In theory. 

[Quisby]

It only affects some parts of Byron and not others. It seems to me (and I don't know Byron that well having only stayed 3-4 times over the years) is that it excludes the popular area.
 

Looking at the map in this story here https://www.news.com.au/travel/travel-updates/travel-stories/byron-bay-begins-60day-cap-on-shortterm-holiday-rentals/news-story/c4845e8a0b8185b8e9b31276d1c78a88

However, further afield it seems that it will affect properties like this which is absurd IMO -

https://www.forgetmenotfarmcottages.com.au/

[Sugarplum Poobah]

17 minutes ago, Quisby said:

It only affects some parts of Byron and not others. It seems to me (and I don't know Byron that well having only stayed 3-4 times over the years) is that it excludes the popular area.
 

Looking at the map in this story here https://www.news.com.au/travel/travel-updates/travel-stories/byron-bay-begins-60day-cap-on-shortterm-holiday-rentals/news-story/c4845e8a0b8185b8e9b31276d1c78a88

However, further afield it seems that it will affect properties like this which is absurd IMO -

https://www.forgetmenotfarmcottages.com.au/

The cap only applies to non-hosted accommodation. I'm pretty sure that a swathe of purpose-built holiday cottages on a working farm doesn't fall under that umbrella.

Edited September 24 by Sugarplum Poobah
Grammar

[Quisby]

8 minutes ago, Sugarplum Poobah said:

The cap only applies to non-hosted accommodation. I'm pretty sure that a swathe of purpose-built holiday cottages on a working farm doesn't fall under that umbrella.

Ah yes - I missed the non-hosted bit.

ETA: Further reading and it looks like the cottages would fall under the umbrella of Agritourism not STRA. 

Edited September 24 by Quisby

[MerryMadigralMadge]

1 hour ago, LemonMyrtle said:

My thoughts too. I can’t see how this will help since they make most their money at peak season and often leave the place empty at other times anyway. Maybe it’s less of a tax write off when the maximum you can claim is 60 days worth? That might affect massively negatively geared properties. 

is that you can only claim all the expenses of a rental property for the time it's actually available to rent, or rented? That includes interest, real estate fees, maintenance etc - so while the income might be high for 60 days, will it be enough if you can only claim 60 days of expenses - the interest, insurance, maintenance, etc. 

The cap not including the main tourist area makes sense - that's apartments, houses in the main strip - it's the suburbs in these costal areas near all the amenities like schools, sport centres etc that should be capped. 

My neighbours have bought a holiday home in a coastal NSW town - they showed me pictures, it was clearly an actual home in the listing, with kids stuff in the bedrooms etc, in the suburban part of that town near the town school etc; now it's an Airbnb and they use it themselves 2-3 weeks a year. That kind of holiday homing for profit should be capped, I can see the argument that this prices out locals, and strangles common community. 

[Pepper]

@MerryMadigralMadge I think that’s exactly what they’re aiming at. Houses that used to be permanently occupied family houses that are being turned into holiday houses. Not the purpose built holiday cottages etc

[Not Escapin Xmas]

I'm all for it. You have to start somewhere with this sort of legislation and anything is better than nothing. It can (and probably will be) extended over time.

[Yogaalaates]

48 minutes ago, Pepper said:

@MerryMadigralMadge I think that’s exactly what they’re aiming at. Houses that used to be permanently occupied family houses that are being turned into holiday houses. Not the purpose built holiday cottages etc

Yep, it’s a problem to treat houses as investments when there are people who need them as homes. 

[Lesley225]

It will be interesting to see what changes, as PP have said a dwelling  has to be available for rent for the costs to be deductible and all the test cases are very old.  People can in most cases claim for the whole years expenses when rented for a very short time. 

But if laws do not allow it to be rented then it's not available for rent so does that  reduce the time allowed to claim.  Very interesting.  

[MerryMadigralMadge]

14 minutes ago, Lesley225 said:

It will be interesting to see what changes, as PP have said a dwelling  has to be available for rent for the costs to be deductible and all the test cases are very old.  People can in most cases claim for the whole years expenses when rented for a very short time. 

But if laws do not allow it to be rented then it's not available for rent so does that  reduce the time allowed to claim.  Very interesting.  

tax office says yes, you can't claim*

https://www.ato.gov.au/individuals-and-families/investments-and-assets/holiday-homes#ato-Holidayhomenotgenuinelyavailableforrent

Example: not available for rent for part of the year

Bindi and Ash own a holiday home in a regional town located close to several bushwalking tracks. The most popular times for tourists to visit the town is over the warmer summer months up until the end of the Easter school holidays. The local government requires properties that are let on a short-term basis to be registered and limits the number of days they can be let, up to 180 days.

To keep within the 180-day limit, Bindi and Ash don't advertise or let the property on a short-term basis from the end of April to the end of October each year. During this period, they use the property themselves or allow family and friends to use it.

During the period from November to April, Bindi and Ash receive $18,500 from renting their holiday home. They incur expenses of $32,250 in respect of the property over the whole income year. This amount includes agent's commission and advertising costs of $2,535.

The property is not rented or genuinely available for rent during the period from 29 April to 31 October (186 days). Bindi and Ash can't claim a deduction for expenses incurred during this period. They can claim expenses for the period the property is rented or genuinely available for rent (179 days). They can also claim the full amount of the agent's commission and advertising as that relates solely to the period it was rented.

 

*not an accountant

 

[pelagic]

I don't see how renting a house to others is attractive at all anymore. The cost of house repairs now is so high that a year of rent won't even cover a lot of them. A person near us had to spend $20K fixing their home after having some careless renters. They kept the bond. Big deal. 

[Lesley225]

@MerryMadigralMadge  Ah should have looked, greatly updated and certainly makes sense.  Is being able to claim for only 60 days worth it?  Perhaps around Byron Bay where you can ask for top dollar  but it would greatly reduce the deductions and probably not in other places if more bring this in. 

[purpleduck]

On 24/9/2024 at 1:51 PM, pelagic said:

I don't see how renting a house to others is attractive at all anymore. The cost of house repairs now is so high that a year of rent won't even cover a lot of them. A person near us had to spend $20K fixing their home after having some careless renters. They kept the bond. Big deal. 

Wouldn’t that fall under landlords insurance?

[CrankyM]

I hope it makes a difference. And I hope they bring it where I live. There has been talk of it. Because not only is there very few rentals, because of scarcity it has driven the price sky high. (Government jobs are part of that issue because they heavily subsidise housing here. So someone in one of those jobs is only paying about $300 a week and the government is covering the rest which is often double or triple what the person employed pays. But we also desperately need doctors, nurses, teachers etc. but I also know many many low income people leaving so all those government employees can’t get childcare, or their cars fixed, or get served in restaurants etc.)

[Annon222]

11 hours ago, purpleduck said:

Wouldn’t that fall under landlords insurance?

You claim insurance for massive expenses, not small ones. Insurance is really for when your house burns down

If you claim, 20k, what do you think happens to the premium?

[purpleduck]

1 hour ago, Annon222 said:

You claim insurance for massive expenses, not small ones. Insurance is really for when your house burns down

If you claim, 20k, what do you think happens to the premium?

Well, we have home and contents insurance for our home with a $5000 excess. Because we can afford to make small repairs up to $5000. If the repairs are more than that, then that’s what the insurance is there for. Should I be expecting a $15k increase in my annual premium if I make a claim?