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The NSW Government Has Cracked Down On Airbnb

Planning on renting out your apartment for 181 days this year? You may need to think again.

What you need to know
  • The NSW government has imposed new restrictions on property owners who do not live in their homes on apartments when letting out on Airbnb
  • Investors will be able to rent out their properties for 180 days
  • Breaches to a new code of conduct may result in a five year ban from home-sharing platforms

Sweeping changes to rules around short-term holiday letting in NSW have targeted investors and disruptive guests.

Under the new restrictions, owners that do not live in their property will only be able to rent out their unit on Airbnb for 180 days per year within the greater Sydney area.

There will be no automatic cap for the rest of the state, but councils may choose to impose their own limits.

Strata owners corporations will also be given the power to block apartments from being used as Airbnbs if 75 per cent of strata owners vote against it, however they will not be able to ban owner-occupiers from renting individual rooms.

Online book platforms including Airbnb contribute an estimated $31 million annually to the Australian economy. Image: Getty

The new scheme, which was unveiled by Better Regulations Minister Matt Kean, is targeting investors who buy up Sydney apartments with the intention of listing them on Airbnb, thereby removing rental properties from the market and potentially escalating affordability.

Planning Minister Anthony Roberts said the 180-day cap was designed to ensure that home-sharing platforms do not have any negative impact on rental affordability.

A mandatory code of conduct will be developed for online accommodation platforms to address issues like noise levels and disruptive guests.

The laws will also impose a 'two strike' policy, which means home-share users who commit two serious breaches of the new code within two years will be banned for five years from any home-sharing platform.

"We are about to introduce the toughest laws in the world when it comes to bad behaviour," Kean said.

Despite the crackdown on an industry that was relatively unregulated, Airbnb has welcomed the changes.

"They bring the rules for home sharing into the 21st century and send a clear signal that NSW embraces healthy tourism," Airbnb's Global Head of Policy Chris Lehane said.

"These statewide rules strike the right balance. They protect the rights of respectful and responsible home sharers, while taking a zero tolerance stance on bad behaviour."

The company's Country Manager for Australia Sam McDonagh sys with the cost of living painfully high, these "fair and innovative" rules will allow people to share their homes and make extra income.

According to Deloitte's Developments in the Collaborative Economy in NSW report, the number of properties listed in the state more than doubled in 12 months to 38,000 properties from 16,200 in 2015. Image: Getty
Will It Work?

While Independent Member for Sydney Alex Greenwich welcomes the changes, he does not believe they go far enough to protect buildings from turning into "quasi hotels", as owners' corporations do not have a say when short term letting is less than  180 days a year.

"180 days could easily be used as a commercial model and does not truly reflect the sharing economy," Greenwich said.

“180 days could be all of summer and most weekends; it could be every weekend with a day or two on either side. Letting a home for 180 days a year in areas of high tourist demand could be more profitable than letting out to long term tenants."

Greenwich said the NSW government has failed to look at international models, such as the 90 day cap seen in London, San Francisco and New Orleans.

The changes come after the government was forced to pull its plans to regulate Airbnb last month, after Premier Gladys Berejiklian and the Cabinet failed to gain backbench support for the reforms.