Outcry over council's 'extortionate' fee hike on short-stay homes
A coastal Victorian council has defended its move to increase fees for providers of short-stay rental accommodation as hundreds of community members urge it to rethink the decision.
The Bass Coast Shire, which takes in holiday hotspots like Phillip Island on Victoria's south-east coast, is one of just a handful of Victorian areas with local laws regulating short-stay accommodation.
The council says the extra fees are necessary to cope with additional costs created by the holiday accommodation industry, but tourism advocates warn it may deter holiday home owners from renting at all, meaning more homes will stay empty for longer.
Lisa, who did not want her last name published, bought her Phillip Island holiday home with her partner two years ago and said they worked very hard to afford it.
Lisa says she and her partner have worked hard to afford their Phillip Island holiday home. (ABC News: Georgia Lenton-Williams)
The couple is currently renting the property using an online platform at a base rate of about $220 per night.
"We thought we could just share the home with other people and let them enjoy it until we're fully ready to move down here full time," she said.
Earlier this year, Bass Coast Shire Council increased its annual registration fee to short-stay providers like Lisa from $324 to $600 — or $900 for homes with more than five bedrooms.
The fee hike caught Lisa off guard.
"It seems a bit extortionate really," she said.
The Bass Coast Shire takes in holiday hotspots like Phillip Island. (Supplied)
Accusations of double-dipping
While governments across Australia have taken different approaches to regulating the short-stay sector, a statewide levy of 7.5 per cent came into effect in Victoria in 2025.
Some councils, like Warrnambool, scrapped local fees after the levy was introduced, but a handful retained local laws.
That includes the Bass Coast, which has had a registration process in place since 2023 and now has the highest fees in the state.
The retention of the local fees has led some short-stay providers to accuse governments of "double-dipping".
However, University of Sydney housing expert Nicole Gurran said the state booking levy was likely also being paid by consumers.
"It may be a bit of both: a bit of a provider absorbing the cost and a bit of them adding them on to the fee paid by the customer," she said.
Professor Nicole Gurran says local councils are facing several challenges with tourism population booms. (ABC News: Patrick Stone)
Dr Gurran said short-stay rentals and sudden population booms over holiday periods were difficult for regional councils to deal with.
"You've got increased costs associated with waste collection, for instance, associated with managing beaches, parks, public spaces," she said.
Bass Coast Shire mayor Brett Tessari agreed, saying the fee was introduced to "control" issues related to short-stay accommodation, including complaints from permanent residents about disruptive behaviour.
Bass Coast Mayor Brett Tessari says the new fee is an attempt to address issues associated with short-stay accommodation. (ABC News)
"The waste, the rubbish, the anti-social behaviour — it's our regular permanents that put up with all that," he said.
"The cost is quite significant and we realised before this increase that we were just nowhere near where we needed to be."
While Victoria's statewide levy raised $85.8 million in 2025, that money is directed towards social housing investment rather than being used used to cover local costs.
Rental shortage after pandemic migration
More than 1,000 short-stay properties in the Bass Coast region have registered with the council.
However, data collected by AirDNA, a company that provides analytics on the short-term rental industry, identified more than 2,300 listings advertised across Airbnb and Stayz in the area in August.
The Bass Coast is also facing a housing shortage after a surge in popularity during the COVID-19 pandemic saw city residents eager to escape lockdowns move to regional areas.
The result was higher property prices and a shortage of rentals.
Lisa has organised a petition against the new Bass Coast council fee. (ABC News: Georgia Lenton-Williams)
Lisa, who is organising a petition calling on the council to drop the fee hike, said some of the 550 responses indicate people believe the council is trying to push holiday rentals out of the market — a claim denied by the council.
Inverloch Tourism Association president Glenn Morris, who is also involved in the petition, said he was concerned the fees would make it unviable for people to list their holiday homes as short-term accommodation.
He said Inverloch gets a "population explosion" during summer and tourism plays a "huge" role in the local economy.
"We need our short-stay accommodation. We don't have enough accommodation in peak times now," he said.
Inverloch Tourism Association's Glenn Morris says Bass Coast has an accommodation shortage. (ABC News: Georgia Lenton-Williams)
Lisa said people would not give up their holiday homes in any case.
"What people are saying is they're just going to keep the properties themselves and they're going to use them," she said.
"And they will stay vacant for longer.
"So it's a lose-lose situation because people who want to come down to visit the island as a tourist are going to have less choice."
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