Wednesday, 28 August 2024
Bills
Short Stay Levy Bill 2024
Bills
Short Stay Levy Bill 2024
Statement of compatibility
Tim PALLAS (Werribee – Treasurer, Minister for Industrial Relations, Minister for Economic Growth) (10:44): In accordance with the Charter of Human Rights and Responsibilities Act 2006, I table a statement of compatibility in relation to the Short Stay Levy Bill 2024:
In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006, (Charter), I make this Statement of Compatibility with respect to the Short Stay Levy Bill 2024.
In my opinion, the Short Stay Levy Bill 2024 (Bill), as introduced to the Legislative Assembly, is compatible with the human rights as set out in the Charter. I base my opinion on the reasons outlined in this Statement.
Overview
This Bill introduces the short stay levy (SSL) and consequently amends the Taxation Administration Act 1997 (TA Act) and the Owners Corporation Act 2006 (OC Act).
Many provisions of the Bill do not engage the human rights listed in the Charter because they either do not affect natural persons, or they operate beneficially in relation to natural persons.
Human rights issues
The rights under the Charter that are relevant to the Bill are the right to property, the right to privacy, the right to freedom of movement, the right to a fair hearing, the presumption of innocence and the right against self-incrimination.
Right to property: section20
Section 20 of the Charter provides that a person must not be deprived of his or her property other than in accordance with law. This right is not limited where there is a law that authorises a deprivation of property, and that law is adequately accessible, clear and certain, and sufficiently precise to enable a person to regulate their conduct.
Imposition of SSL
Part 2 of the Bill prescribes the regime by which the SSL operates. These clauses engage the right to property to the extent that a natural person may be liable for the SSL.
The imposition of SSL is not arbitrary because it is precisely formulated in Part 2 of the Bill. The clauses are adequately accessible, clear and certain, and sufficiently precise to enable affected natural person taxpayers to inform themselves of their legal obligations and to regulate their conduct accordingly. Furthermore, these natural persons will have the protections provided by the TA Act including rights of objection, review, appeal and refund of overpaid tax.
Reimbursement for SSL by occupiers of short stay accommodation
Clause 15 obliges a person, other than the owner or renter, who is in exclusive occupation of short stay accommodation, and who accepts direct bookings in respect of that accommodation, to remit amounts of money to the owner equivalent to any SSL chargeable in respect of those bookings and applicable penalty tax and interest. This may engage the right to property to the extent that natural person occupiers may be liable to make payments to owners of short stay accommodation.
The amounts required to be paid to owners by occupiers are not arbitrary as the SSL is precisely formulated in Part 2 of the Bill. These clauses are adequately accessible, clear and certain, and sufficiently precise to enable affected natural person occupiers to inform themselves of their legal obligations and to regulate their conduct accordingly.
OC Act amendments
Division 1, Part 6 of the Bill amends the OC Act to allow owners corporations to make rules by special resolution prohibiting the use of certain lots as short-stay accommodation. This engages section 20 of the Charter to the extent that an apartment owner or lessee may be deprived of the right to use the apartment for short-stay accommodation.
Any deprivation of property pursuant to these OC Act amendments would be in accordance with the law and would not be arbitrary. Special resolutions require the agreement of 75 per cent of the total lot entitlements of all lots in the owners corporation. Further, disputes about rule breaches, including whether rules were validly made, may be referred to the Victorian Civil and Administrative Tribunal for resolution. Any limit on the right to property under these provisions is justified as allowing owners corporations to make rules regarding the use of lots for short stay accommodation is directly related to the purpose of the Bill to promote the return of residential property to the long-term rental market. The amendments further protect the amenity of properties governed by the owners corporation for owners and residents. There are no less restrictive means available to achieve the objectives of the amendments.
TA Act investigative powers of tax officers
The TA Act will apply to the Bill. Part 9 of the TA Act provides authorised officers with investigation powers to administer and enforce taxation laws. Section 20 of the Charter is relevant to a number of powers which provide for authorised officers to enter certain premises, and to seize or take items. These powers are discussed in detail below in relation to the right to privacy.
The powers of an authorised officer include, under section 76 of the TA Act, the power to seize a document or thing where the officer has reason to believe or suspect it is necessary to do so to prevent its concealment, loss, destruction or alteration. Similarly, section 81 of the TA Act provides that an authorised officer may seize a storage device and the equipment necessary to access information on the device if the authorised officer believes, on reasonable grounds, that the storage device contains information relevant to the administration of a taxation law and it is not otherwise practicable to access the information on the device.
Sections 76 and 81 of the TA Act, as they will apply to the SSL, do not limit the right in section 20 of the Charter because they are sufficiently confined and structured, accessible, and formulated precisely such that any deprivation occurs in accordance with the law. Further, these provisions guard against any permanent interference with property where no offence has been committed. For example, the TA Act provides that reasonable steps must be taken to return a document or thing that is seized if the reason for its seizure no longer exists (section 84), and the document or thing seized must be returned within the retention period of 60 days, unless the retention period is extended by an order of the Magistrates Court (section 85).
Right to privacy: section13
Section 13(a) of the Charter provides that every person has the right to enjoy their private life, free from interference. This right applies to the collection of personal information by public authorities. An unlawful or arbitrary interference to an individual’s privacy will limit this right.
Obligation to provide SSL liability information
Clauses 17 and 18 of the Bill require those liable to pay SSL to register with the Commissioner, lodge returns, and pay the requisite tax. Returns are to be in the form, and contain the information, determined by the Commissioner. Clause 20 of the Bill requires registered SSL payers to notify the Commissioner if, because of a change in circumstances, the registered SSL payer is no longer incurring a liability for the SSL and does not expect to incur any such liability in the future.
Clause 21 of the Bill requires an owner to provide a booking platform provider with a declaration under the section if a premises is not short stay accommodation.
Not all information required to be provided in a return or declaration will be personal information. However, to the extent that the collection of personal information may result in interference with a person’s privacy, any such interference will be lawful and not arbitrary. These provisions do not require that a person’s personal information be published, and only require the provision of information necessary to achieve the purpose of taxation administration.
TA Act investigative powers of tax officers and secrecy provisions
The investigative powers of the Commissioner and authorised tax officers will apply to the administration of the SSL. The following investigation powers may engage the right to privacy, as well as the right not to impart information, which forms part of the right to freedom of expression under section 15 of the Charter:
• Section 73 of the TA Act provides that the Commissioner may, by written notice, require a person to provide the Commissioner with information, produce a document or thing in the person’s possession, or to attend and give evidence under oath.
• Section 76 of the TA Act which provides for entering and searching premises, as outlined above.
• Section 77 of the TA Act provides that an authorised officer may apply to a magistrate for a search warrant in relation to a premises, including a residence, if the authorised officer considers on reasonable grounds that there is, or may be within the next 72 hours, on the premises a particular thing that may be relevant to the administration or execution of a taxation law.
• Section 81 of the TA Act which provides for obtaining information from a storage device, as outlined above.
• Section 86 of the TA Act provides that an authorised officer may, to the extent it is reasonably necessary to do so for the administration or execution of a taxation law, require a person to give information, produce or provide documents and things, and give reasonable assistance, to the authorised officer.
In each provision that permits investigators to exercise powers of entry and search, the powers of investigators and other authorised persons are clearly set out in the TA Act and are strictly confined by reference to their purpose. They are also subject to appropriate legislative safeguards.
Section 92 of the TA Act permits a tax officer to make certain disclosures of information obtained in the administration of a taxation law. Specifically, section 92(1) permits the disclosure of such information for several different purposes, including in accordance with a requirement imposed under an Act, in connection with the administration or execution of a taxation law, to an authorised recipient such as the Ombudsman or a police officer of or above the rank of Inspector, or in connection with the administration of a legal proceeding arising out of a recognised law.
Consequential amendments to section 92(1) of the TA Act pursuant to clause 32 of the Bill will further permit disclosures of information obtained under or in relation to the Bill to a Council for the purpose of regulating short stay accommodation.
The types of information that may be disclosed include, but are not limited to, information regarding land ownership, tax liabilities and payments by taxpayers, taxation defaults by taxpayers, and applications for objection, appeal and review under Part 10 of the TA Act by taxpayers.
Permitted disclosures are strictly confined to their legitimate purposes and are subject to considerable legislative safeguards. In particular, section 94 of the TA Act prohibits ‘secondary disclosure’, that is, on-disclosure of any information provided by a tax officer under section 92, unless it is for the purpose of enforcing a law or protecting public revenue and the Commissioner has consented, or a disclosure made with the consent of the person to whom the information relates (or at the request of a person acting on behalf of that person). Further, section 95 provides that an authorised officer is not required to disclose or produce in court any such information unless it is necessary for the purposes of the administration of a taxation law, or to enable a person to exercise a function imposed on the person by law.
Further, the amendments to section 92(1) of the TA Act ensure that the Commissioner and municipal councils can exercise their respective regulatory and administrative functions in accordance with legislation.
Accordingly, to the extent that these provisions could interfere with a person’s privacy, any interference would not constitute an unlawful or arbitrary interference.
Freedom of movement: section12
TA Act investigative powers
Section 12 of the Charter provides that every person lawfully within Victoria has the right to move freely within Victoria. As the SSL will be administered under the TA Act, the administration of SSL may involve the exercise of the investigative powers provided in section 73 of the TA Act. These investigative powers may also be exercised in relation to the collection of reportable information under Part 9 of the TA Act.
As set out above, the administration of the SSL may involve the exercise of investigative powers provided in section 73 of the TA Act. Among other things, this section provides that the Commissioner or an authorised officer may exercise their power to direct a natural person to attend and give evidence in relation to a matter. Accordingly, a person’s right to move freely within Victoria may be engaged.
Although the power to compel a person to attend a particular place at a particular time may limit a person’s freedom to choose to be elsewhere at that time, this differs qualitatively from the types of measures that Victorian courts have regarded as engaging the right to freedom of movement, such as restrictions placed on a person’s place of residence, or ability to leave their residence, and police powers to conduct a traffic stop.
To the extent that section 73 of the TA Act limits the right of freedom of movement, any such limit is demonstrably justified under section 7(2) of the Charter, as the Commissioner’s power to compel a person’s attendance to give evidence will in certain circumstances be essential to obtain the information needed for the proper administration of the SSL, and for the collection of reportable information in accordance with the TA Act.
Right to fair hearing: section24(1)
TA Act review processes
The right to a fair hearing is protected under section 24 of the Charter which provides that a person charged with a criminal offence or a party to a civil proceeding has the right to a fair hearing. The right to a fair hearing applies to both courts and tribunals, such as the Victorian Civil and Administrative Tribunal. Generally, the right to a fair hearing is concerned with procedural fairness and access to a court or tribunal, rather than the substantive fairness of a decision of a court or tribunal determined on the merits of a case.
Clause 33 of the Bill inserts a new subsection (14) into section 135 of the TA Act to provide that it is the intention of sections 5, 12(4), 18(1), 96(2) and 100(4) of the TA Act, as those sections apply after the commencement of the Bill, to alter or vary section 85 of the Constitution Act 1975. These provisions preclude the Supreme Court from entertaining proceedings of a kind to which these sections apply, except as provided by those sections.
Section 5 of the TA Act defines the meaning of a non-reviewable decision in relation to the TA Act. ‘Non-reviewable’ is referred to in sections 12(4) and 100(4) of the TA Act.
The reason for limiting the jurisdiction of the Supreme Court in relation to a compromise assessment under section 12 of the TA Act is that agreement has been reached between the Commissioner and a taxpayer on the taxpayer’s liability, and the purpose of section 12 would not be achieved if a compromise assessment were reviewable.
Section 18 of the TA Act establishes a refund application procedure, adherence to which is a condition precedent to taking any further action for recovering refunds. The purpose of the provisions is to give the Commissioner the opportunity to consider a refund application before any collateral legal action can be taken. The purpose of these provisions would not be achieved if the Commissioner’s actions were subject to review.
Division 1 of Part 10 of the TA Act establishes an exclusive code for dealing with objections, and this Division will apply where the Commissioner issues an assessment for SSL. This code establishes the rights of objectors in a statutory framework and precludes any collateral actions for review of the Commissioner’s assessment. The objections and appeals provisions of Part 10 of the TA Act establish that review of assessments is only to be undertaken in accordance with an exclusive code identified in that Part. The purpose of these provisions would not be achieved if any question concerning an assessment was subject to judicial review except such judicial review as provided by Division 2, Part 10 of the TA Act.
A power is provided to the Commissioner under section 100 of the TA Act, which provides the Commissioner with discretion to allow an objection to be lodged even though it is out of time. This decision is non-reviewable to ensure the efficient administration of the TA Act and to enable outstanding issues relating to assessments to be concluded expeditiously.
To the extent that limiting the jurisdiction of the Supreme Court may limit a natural person’s fair hearing rights as protected under section 24(1) of the Charter, any such limit would be demonstrably justified. The classification of certain decisions under the TA Act as ‘non-reviewable’ is directly related to the particular statutory purpose and context of those particular decisions, and the TA Act provides an alternative regime for dealing with objections, which is necessary for the efficient discharge of the Commissioner’s functions under the TA Act.
Presumption of innocence: section25(1)
The right in section 25(1) is engaged where a statutory provision shifts the burden of proof onto an accused in a criminal proceeding, so that the accused is required to prove matters to establish, or raise evidence to suggest, that the accused person is not guilty of an offence.
TA Act defence of reasonable excuse
The TA Act will apply to the SSL. The right to be presumed innocent may be considered relevant to strict liability offences in the TA Act which place an evidential burden on the defendant to rely on a defence such as the defence of honest and reasonable mistake.
Section 73 of the TA Act empowers the Commissioner to issue a written notice requiring a person to provide information, produce a document or thing, or give evidence. Section 73A provides that the Commissioner may certify to the Supreme Court that a person has failed to comply with a requirement of a notice issued under section 73. The Supreme Court may inquire into the case and may order the person to comply with the requirement in the notice. Section 73A(4) provides that a person who, without reasonable excuse, fails to comply with an order of the Supreme Court under section 73A(2), is guilty of an offence.
Section 88 of the TA Act makes it an offence for a person, without reasonable excuse, to refuse or fail to comply with a requirement made or to answer a question of an authorised officer asked in accordance with sections 81 or 86 of the TA Act.
Section 90 of the TA Act establishes a defence of reasonable compliance for offences relating to the investigation powers of authorised officers under Part 9 of the TA Act. It provides that a person is not guilty of an offence if the court hearing the charge is satisfied that the person could not, by the exercise of reasonable diligence, have complied with the requirement to which the charge relates, or that the person complied with the requirement to the extent that he or she was able to do so.
TA Act failure to exercise due diligence
The right to be presumed innocent is also relevant to section 130C of the TA Act. Section 130C of the TA Act establishes the criminal liability of an officer of a body corporate for the failure to exercise due diligence in certain circumstances, and which imposes a legal burden of proof on that officer. Section 130C provides that if a body corporate commits a specified offence, such as giving false or misleading information to tax officers contrary to section 57(1), or tax evasion contrary to section 61, an officer of the body corporate is also deemed to have committed the offence.
Section 130C(3) provides that it is a defence to a charge for an officer of a body corporate to prove that they exercised due diligence to prevent the commission of the offence by the body corporate.
The defence in 130C(3) of the TA Act imposes a legal burden on the defendant. The imposition of a legal burden to rely on the defence of due diligence is compatible with the right to presumption of innocence in section 25(1) of the Charter, as any limits on the right will be reasonably justified under section 7(2) of the Charter. Section 130C applies only to a narrow range of offences of dishonesty, and only to officers of a body corporate as persons who carry on a specific role and possess significant authority and influence over the body corporate.
The purpose of these provisions is to ensure compliance with the SSL by deterring intentional acts of dishonesty in the administration of the SSL. A person who elects to undertake a position as officer of a body corporate accepts that they will be subject to certain requirements under the Bill and the TA Act and will be expected to be able to demonstrate their compliance with these requirements. This includes the expectation that an officer of a body corporate can demonstrate compliance with a requirement to exercise due diligence to prevent the commission of these offences of dishonesty by the body corporate taxpayer. Moreover, whether an officer of a body corporate has exercised due diligence is a matter peculiarly within the knowledge of that person. Further, a defence is available for the benefit of an accused to escape liability where they have taken reasonable steps to ensure compliance in respect of what could otherwise be an absolute or strict liability offence.
Conclusion on presumption of innocence
Although these provisions require a defendant to raise evidence of a matter to rely on a defence, it imposes an evidential, rather than legal burden.
Courts in other jurisdictions have generally taken the approach that an evidential onus on a defendant to raise a defence does not limit the presumption of innocence. The defences and excuses provided relate to matters within the knowledge of the defendant, which is appropriate in circumstances where placing the onus on the prosecution would involve the proof of a negative which would be very difficult. These provisions of the TA Act are compatible with the right to the presumption of innocence protected by the Charter.
Rights in criminal proceedings: section25(2)(k)
TA Act investigative powers
Section 25(2)(k) of the Charter provides that a person charged with a criminal offence is entitled not to be compelled to testify against himself or herself or to confess guilt. The Supreme Court has held that this right, as protected by the Charter, is at least as broad as the common law privilege against self-incrimination. It applies to protect a charged person against the admission in subsequent criminal proceedings of incriminatory material obtained under compulsion, regardless of whether the information was obtained prior to or subsequent to the charge being laid. The common law privilege includes immunity against both direct use and derivative use of compelled testimony.
Section 86 of the TA Act, which will apply to the SSL, is outlined above. It is an offence to fail to comply with a requirement made or to answer a question under this section. Section 87(1) limits the right to protection against self-incrimination by providing that a person is not excused from answering a question, providing information, or producing a document or thing on the ground that to do so might tend to incriminate the person or make the person liable to a penalty. Section 87(2) provides that, if a person objects to answering a question, providing information, or producing a document or thing, the answer, information, document or thing is not admissible in any criminal proceeding other than proceedings for an offence against a taxation law, or proceedings for an offence in the nature of perjury.
Section 87(1) of the TA Act is a reasonable limit on the right to protection against self-incrimination under section 7(2) of the Charter. The ability of an authorised officer to require a person to give information or answer questions will be necessary for the proper administration of the SSL. Section 87(2) of the TA Act only authorises the admission of evidence obtained under section 87(1) in an offence against a taxation law, or proceedings for perjury, and otherwise preserves both the direct use immunity and derivative use immunity. This section directly promotes the objective of the TA Act, which is to facilitate the administration and enforcement of Victoria’s taxation laws and is a significant public purpose.
Further, with respect to the power of an authorised officer to require the production of documents, I note that at common law, the protection accorded to the compelled production of pre-existing documents is considerably weaker than the protection accorded to oral testimony or to documents brought into existence to comply with a request for information.
There are no less restrictive means available to achieve the purpose of enabling the proper administration of the SSL, as providing an immunity that applies to the offence of perjury or an offence under the SSL or the TA Act would unreasonably obstruct the role of the authorised person to investigate compliance with the SSL.
Conclusion
For these reasons, in my opinion, the provisions of the Bill are compatible with the rights contained in sections 12, 13, 20, 24(1), 25(1) and 25(2)(k) of the Charter.
TIM PALLAS MP
Treasurer
Section 85(5) of the Constitution Act 1975
Tim PALLAS: I wish to make a statement under section 85(5) of the Constitution Act 1975 of the reasons for altering or varying that section by the Short Stay Levy Bill 2024.
Section 85 of the Constitution Act 1975 vests the judicial power of Victoria in the Supreme Court and requires a statement to be made when legislation that directly or indirectly repeals, alters or varies the court’s jurisdiction is introduced. Clause 33 of the bill inserts a new subsection (14) into section 135 of the Taxation Administration Act 1997 to provide that it is the intention of sections 5, 12(4), 18(1), 96(2) and 100(4) of the Taxation Administration Act 1997, as those sections apply after the commencement of that clause, to alter or vary section 85 of the Constitution Act 1975.
The bill introduces the new short-stay levy. Part 6 of the bill makes consequential amendments to the Taxation Administration Act 1997 to enable the SSL, consistent with other state taxes, to be administered under the Taxation Administration Act 1997 and any regulations made under it.
The Supreme Court’s jurisdiction is altered to the extent that the Taxation Administration Act 1997 provides for certain non-reviewable decisions and establishes an exclusive code that prevents proceedings concerning an assessment or refund or recovery of tax being commenced except as provided by that act. It is desirable that the legislative regime under the Taxation Administration Act 1997 applies to the SSL in the same way as it does to other taxes administered under the Taxation Administration Act 1997.
Accordingly, in order to ensure that the jurisdiction of the Supreme Court is limited in relation to the SSL in the same way as it is in relation to other Victorian taxes, it is necessary to provide that it is the intention of this bill, for the relevant provisions of the Taxation Administration Act 1997 to apply to the administration of the SSL, and for the jurisdiction of the Supreme Court to be altered accordingly.
Section 5 of the Taxation Administration Act 1997 defines the meaning of ‘non-reviewable decision’ in relation to that act, which will also apply to the SSL. No court, including the Supreme Court, has jurisdiction or power to entertain any question as to the validity or correctness of a non-reviewable decision.
Section 12(4) of the Taxation Administration Act 1997 provides that the making of a compromise assessment is a non-reviewable decision. Similarly, section 100(4) provides that a decision by the commissioner of state revenue not to permit an objection to be lodged out of time is a non-reviewable decision. Decisions may be made under section 12(4) or section 100(4) in relation to the SSL.
Section 18(1) of the Taxation Administration Act 1997 prevents proceedings being commenced in the Supreme Court for the refund or recovery of a tax except as provided in part 4 of the Taxation Administration Act 1997. As the SSL will be a tax for the purposes of section 18(1), proceedings for its refund or recovery will be similarly limited.
Section 96(2) of the Taxation Administration Act 1997 prevents a court, including the Supreme Court, considering any question concerning an assessment of a tax except as provided by part 10 of the Taxation Administration Act 1997. As the SSL will be a tax for the purposes of section 96(2), proceedings in relation to any assessment of SSL would be similarly limited.
To ensure that the jurisdiction of the Supreme Court is limited in relation to the SSL in the same way as it is in relation to other taxes administered under the Taxation Administration Act 1997, it is necessary to provide that it is the intention of sections 5, 12(4), 18(1), 96(2) and 100(4) of the Taxation Administration Act 1997 to alter or vary section 85 of the Constitution Act 1975.
I commend the bill to the house.
Second reading
That this bill be now read a second time.
I ask that my second-reading speech be incorporated into Hansard.
Incorporated speech as follows:
In our Housing Statement last September, the Government recognised the issues with adequate access to long-term rental properties across the state, particularly in regional Victoria.
To encourage the return of more properties to the long-term rental market, this Bill introduces a levy on short stay accommodation booking fees, for bookings made on and after 1 January 2025.
While short stay accommodation has become a popular feature of Victoria’s visitor economy, it has reduced the ability for many properties to be used for longer-term accommodation. When residential properties are used for short stay accommodation they cannot be made available as longer-term accommodation.
This is why we are taking action on short stay accommodation, as part of our plan to unlock housing supply and improve housing affordability pressures felt throughout Victoria.
The short stay levy will fund Homes Victoria to support their important work in building and maintaining social and affordable housing across the state. Revenue collected from the levy will go to Homes Victoria with 25% of funds to be invested in regional Victoria.
The Commissioner of State Revenue (Commissioner) and the State Revenue Office (SRO) will administer the Levy under the Taxation Administration Act 1997 (TAA).
The Bill will also amend the Owners Corporations Act 2006 to address the provision of short stay accommodation in strata developments.
Liability for levy
The levy will apply to each booking of accommodation premises for a short stay of less than 28 days made on or after 1 January 2025.
As the liability arises when a guest completes the short stay, there is no levy if a booking is cancelled prior to the booked dates. If a guest does not cancel the booking but never commences the stay, the levy does apply.
In general, all short stays in properties such as houses and apartments will be liable for the levy. The levy will also apply to short stay accommodation in separate residences, such as cabins and granny flats. The levy applies whether the whole or a part of premises is being rented out for short stays.
Transitional arrangements will be in place so that all bookings made prior to 1 January 2025 will not be liable for the levy, even if the stay ends on or after 1 January 2025.
Principal places of residence
If premises are occupied as the principal place of residence of the owner or renter of the premises, a short stay in that premises will not be subject to the levy. For example, a room made available for short stays in an owner’s or renter’s principal place of residence will not have a levy liability. However, if accommodation is provided in a separate dwelling at the same property this will be subject to the levy.
A principal place of residence is not defined in the Act but it is a concept common to other taxes and schemes administered by the SRO, such as in the relevant eligibility criteria for the First Home Owner Grant and certain concessions and exemptions from land transfer duty and land tax. The meaning of principal place of residence is derived from well-developed common law principles. However, the Bill provides that in determining whether premises are occupied as a principal place of residence of an owner or renter, regard must be had to every place of residence of that person. In the case of renters, it is also a requirement that the residential rental agreement be made in good faith and not for the purpose of avoiding the levy.
Commercial accommodation
The Bill specifically excludes commercial residential properties as defined under Commonwealth GST legislation from the levy base, such as hotels, motels, resorts, hostels, caravan parks and similar accommodation. Commercial accommodation cannot generally be used for long-term residential occupation and is often subject to strict regulatory arrangements.
Other exclusions
The levy will also not be applied to residential student accommodation, rooming houses, retirement villages, residential care facilities, supported residential services, temporary crisis accommodation and accommodation provided by facilities to their employees, contractors or clients. As with commercial accommodation, these types of premises are not considered suitable for long-term rental or for sale on the housing market.
Payment of levy
In most cases the levy will be payable by providers of booking platforms.
A booking platform is defined as a person who carries on a business that facilitates and accepts bookings for short stays, regardless of whether the platform facilitates payment.
If a person uses a booking platform to arrange short stays, the platform provider is responsible for paying the levy to the extent of any stays booked through them.
However, owners and renters are responsible for paying the levy in respect of any direct bookings – that is, bookings they arrange themselves without the use of a booking platform.
Liable parties must register with the Commissioner and lodge regular returns in relation to all short stays provided during the return period. For larger levy payers with annual total booking fees above $75,000, returns must be lodged after the end of each quarter commencing on 1 January, 1 April, 1 July and 1 October. However, if annual total booking fees are $75,000 or less, returns are only required annually after the end of each calendar year. The different return periods will ease the administrative burden on smaller taxpayers. Payment of the levy is due 30 days after the end of the return period.
The rate of the levy is 7.5% of total booking fees for each completed short stay. Total booking fees are inclusive of GST and cleaning fees, as well as amounts waived, refunded or credited for cancelled short stay bookings, but exclude credit card fees and payment surcharges.
Joint and several liability
If a booking platform is used to provide short stay accommodation claimed by the owner or renter to be outside the scope of the levy – for example, because the accommodation is provided in their principal place of residence – they are required to provide a declaration of this to the booking platform.
If this declaration is later found to be incorrect, both the owner and booking platform will be jointly and severally liable for any shortfall in levy payments. The booking platform will have the right to recover any levy amounts paid by them, from the property owner.
Licensees and occupants
The Bill requires licensees or other exclusive occupants of premises (who are not renters), who provide short stay accommodation through direct bookings, to pay amounts to the owner sufficient to cover the levy liability payable, plus GST and any interest or penalty tax payable. If these amounts are not paid the owner will have the right to recover the amount from the licensee or occupant.
Taxation administration
The Bill amends the TAA to make the new Act a taxation law under the TAA. This will give the Commissioner and the SRO the power to administer the levy using the same framework that applies to other taxation laws. This includes the ability to issue assessments, pay refunds, impose penalties and interest on tax defaults, recover unpaid levies, carry out investigations and consider objections. A person assessed for the levy will have entitlements to object to the levy assessment similarly to other taxpayers, as well as rights of refund, review and appeal.
The TAA is also amended to permit the Commissioner to disclose certain levy payer information collected through administering the levy to councils for the purpose of regulation of short stay accommodation activity. The information permitted to be disclosed is expected to include matters such as property owner names and addresses and relevant details about short stay bookings. All disclosures will be subject to the strict terms of the taxpayer secrecy provisions of the TAA. This includes strict conditions to limit the secondary disclosure of information that councils receive from the Commissioner.
Owners corporations
The Bill amends the Owners Corporations Act 2006 to address the provision of short stay accommodation in strata developments. Specifically, the Bill authorises owners corporations to make rules to prohibit the use of lots as short stay accommodation.
This new rule making power will only impact lots in a strata development that are not the principal place of residence of the lot owner or the principal place of residence of a lessee or sublessee of the lot owner, such as a renter under a residential rental agreement.
In addition, an owners corporation rule prohibiting the use of lots as short stay accommodation will be of no effect if the rule is inconsistent with any other Act or law of the state, including relevant local government planning provisions.
This new rule making power may assist in diverting residential lots from the short-stay market to the longer term residential accommodation market, providing additional choice for Victorian renters, and it will also provide an additional option to owners corporations that are concerned at the amenity impact on residents of a strata development flowing from the use of properties as short stay accommodation.
Jurisdiction of the Supreme Court of Victoria
I draw the members’ attention specifically to clause 33 of the Bill. This clause proposes to limit the jurisdiction of the Supreme Court to ensure that the legislative regime under the TAA applies to short stay levy in the same way as it does in relation to any other taxation law. Accordingly, I provide a statement under section 85(5) of the Constitution Act 1975 of the reasons for altering or varying that section by this Bill.
The introduction of the levy and the new powers for owners corporations in this Bill will provide incentive to property owners to transition residential properties away from short term accommodation and towards the longer-term rental market, helping to reduce rental prices and vacancy rates, and increase the availability and affordability of rental housing for all Victorians.
I commend the Bill to the house.
Brad ROWSWELL (Sandringham) (10:49): I move:
That the debate be adjourned.
Motion agreed to and debate adjourned.
Ordered that debate be adjourned for two weeks. Debate adjourned until Wednesday 11 September.