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Hobart council implements higher rates, adds ‘Airbnb tax’ to tackle housing crisis

Pulse Tasmania
Hobart Lord Mayor Anna Reynolds and Councillor Louise Elliot with (inset) Marti Zucco holding a cornflakes box as a prop during Monday night's council meeting. Image / Pulse

The City of Hobart have voted in favour of a new ‘Airbnb tax’ that will see homeowners using their properties for short stay accommodation pay double the rates of owner-occupiers or landlords.

The council also approved higher rates for owners of vacant residential land.

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Under the new system, short stay accommodation will be charged 10.42 cents in the dollar of the property’s Annual Assessed Value (AAV), while vacant residential land will face a rate of 12.28 cents in the dollar of AAV.

For a property generating $620/week ($32,240/year), rates would be $1,679.70 for standard residence and $3,359.40 for short-stay accommodation.

Houses in West Hobart. Image / Pulse

The move aims to encourage property owners to keep homes in the rental market and spur housing development.

General rates will also increase by 6.9 percent, an increase the city says is ‘limited’ and ‘consistent with the current rate of inflation.’

“For the average residential ratepayer, the increase in rates equates to $3.17 per week,” a spokespersons said.

“The rate increase for the average commercial ratepayer will be 8.9 percent.”

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Hobart Lord Mayor Anna Reynolds said the budget will enable the council to provide the services and projects that ‘matter most’ to the community, while providing ‘value for money’ for residents, ratepayers and businesses.

Hobart Lord Mayor Anna Reynolds. Image / Pulse

“We appreciate that every household and business is grappling with the increased cost of living, however, such an increase is necessary for us to adequately service the needs of our growing community,” she said.

“So that Council can continue to provide our community with quality services and infrastructure for future generations, we need to make some crucial decisions now that will have tangible benefits in the years to come.”

“The 2023-24 Budget strikes a balance between addressing financial challenges, prioritising existing services and infrastructure, and delivering a range of projects that will position the City as a thriving place to live, work, visit and invest as a priority.”

Councillor Ryan Posselt at Monday night’s council meeting. Image / Pulse

Councillor Ryan Posselt said the rate rise was “progressive”.

“Moving Airbnb and short stay accommodation to something in the ballpark of commercial rates is a reasonable thing to do.”

Councillor Louise Elliot, who is also president of the Tasmanian Residential Rental Property Owners Association, raised concerns earlier in the night regarding the lack of information provided to her.

Councillor Marti Zucco expressed his concerns over transparency, bringing out a box of Cornflakes to illustrate his point.

“You know you used to find surprises in cornflakes packets? Let me see what I find in here,” Zucco said as he pulled out a piece of paper.

“Look at this! Confidential information… But I’m going to share this confidential…”

2023-24 Budget key points:

  • Rates revenue: 8.5 per cent increase 
  • Average Residential Ratepayer: 6.9 per cent increase 
  • Average Commercial Ratepayer 8.9 per cent increase 
  • Operating Budget: $167.5 million 
  • Underlying Surplus: $500,000 
  • Surplus: $11.1 million 
  • Australian & State Government grants totalling: $14.9 million
  • Capital works program: $35 million 
  • Roads and footpaths: $4.6 million 
  • Cycling infrastructure: $1.4 million 
  • Bushland management & infrastructure: $3.5 million 
  • City Cleaning: $3.6 million 
  • Household waste/recycling/FOGO collections: $3.8 million 
  • Public waste collection: $352,000 
  • Parks/reserves/sporting facilities maintenance & management: $7.3 million 
  • Community and creative programs: $3.2 million 
  • Bushfire management & fire trails: $2.1 million 

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