The Tasmanian government’s plan to implement a new visitor tax on short-stay accommodation has been rejected by the state’s upper house, the Legislative Council, on Wednesday, September 9, 2026. The proposed Short Stay Levy Bill was defeated after Labor and several independent members voted against it, according to ABC News Tasmania.
The bill, a 2024 election commitment by the government, aimed to introduce a 5 per cent levy on the total booking fee for short-stay accommodation booked through online platforms for stays under 28 days. Funds generated by the levy were earmarked to support programs for first-home buyers across Tasmania. The government had intended for the levy to commence from July 1, 2027, as reported by Pulse Tasmania. Earlier proposals had suggested a start date as early as July 1, 2026, or January 1, 2027.
The Legislative Council vote resulted in a six-all split, with President Craig Farrell, the Labor MLC for Derwent, casting the deciding vote against the bill, following convention.
Opposition to the levy highlighted several concerns. Independent MLC Tania Rattray noted that no economic modelling had been undertaken for the proposal. She stated that the “cost and uncertainty of bespoke modelling would outweigh its likely value” and that the levy was not expected to significantly influence visitation decisions due to its small scale within overall travel expenditure. Ms Rattray also revealed that the government’s repeated claim that 83 per cent of short stays were by non-locals was based on information from an industry stakeholder, not a publicly available statistic, though the government considered it a reasonable estimate.
Treasury estimates for the levy’s revenue had also been revised downwards from an initial $11 million to approximately $7.3 million annually. Independent Launceston MLC Rosemary Armitage voiced her opposition, arguing that while the housing crisis was real, the bill had not demonstrated it could provide a solution, stating that “good intentions don’t make bad legislation good”.
Industry body Destination Southern Tasmania (DST) had previously urged the government to reconsider the levy, warning that it risked undermining the state’s visitor economy. DST argued the levy was poorly targeted, could erode Tasmania’s competitiveness, and failed to address the underlying causes of housing challenges, instead imposing extra costs on visitors and residents.
Prior to the bill’s defeat, Treasurer Eric Abetz had defended the proposal, stating it would “strike a fair balance in supporting our visitor economy, respecting property rights and funding first home buyer programs.” He asserted that the levy would be “paid for overwhelmingly by mainland and international tourists” and described it as a “measured, fair and transparent reform”. The bill also included exemptions for homeowners renting out a spare bedroom in their own dwelling and would only apply to bookings made through platforms, not direct bookings.
The defeat of the Short Stay Levy means the government will need to explore alternative strategies to fund first-home buyer initiatives and address housing affordability in the state. Readers can find more details on the original reporting by ABC News Tasmania.