NSW Laws Just Announced - Airbnb killer in Sydney

Discussion in 'Airbnb & Short Term Letting' started by Lacrim, 5th Jun, 2018.

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  1. Lacrim

    Lacrim Well-Known Member

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  2. Depreciator

    Depreciator Moderator Staff Member Business Member

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    It will result in tighter Airbnb supply but arguably a lot of properties that were taken from the long term rental market and parked on Airbnb will go back onto the long term rental market and increase supply.
     
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  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    NSW are about to announce tough new laws which limit shortstay and casual lets to not more than 180 nights per year. Affects greater Sydney only. Outside this area no cap. Believe that the qualifying criteria is any stay which is not a regulated boarding house and which does not comply with NSW residential tenancy lease. (House shares aside I suspect)

    Two strikes rule applying to owners and occupants usinga public register managed by Fair Trading. Two strikes in two years and you are banished for five years is proposed. This could tarnish the person if they later seek to buy in a Strata complex. Aim is preveht scum landlords using Aibnb etc . A ban applies to the person and NOT the property. So a strike at one property could mean loss of other property rents.

    Stratas permitted to ban shortstays if Committee votes. That gonna affect a lot of people I suspect. Or lead to whole buildings of shortstays because of voting dominance. It also allows strata committees to vote to pass bylaws banning Airbnb, but not on properties which are owner-occupied. Strata committees will not have the power to prevent owner-occupiers from renting rooms within their units.

    Better regulation minister Matt Kean described the reforms as the "toughest laws in the country" says SMH.

    More coming : Information coming from meeting just concluded in Macquarie Street

    Comment : This could really affect some rentals. Even if permitted in a building, the 180 night cap will mean a potential partial tax deduction problem unless the owners lists a tenancy lease for the other 6 months. The "available for rent" rule will need to be met all year despite NSW law not allowing shortstay use for 6 months.
     
    Last edited: 5th Jun, 2018
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  4. beachgurl

    beachgurl Well-Known Member

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    That's massive! I know people who have based their entire strategy and their businesses on airbnb. Those who've locked in multiple 3 year leases and sublet as airbnbs will be hit hard.
     
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  5. wylie

    wylie Moderator Staff Member

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    I'm curious to know the percentage of Airbnb places are rented for more than 180 nights in a year and therefore would be affected by this (assuming they fall into the categories allowed to be rented via Airbnb at all)?
     
  6. lightbulbmoment

    lightbulbmoment Well-Known Member

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    Will just encourage more people to use cash
     
  7. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Its doesnt matter how rent is paid. If thats the owners attitude they could expect a strata to be vigilant and take action.
     
  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Yeah. As it hit my inbox I was mid sentance with a client with a $80Kpa rental issue which may now be a problem. Not happy is an understatement. And its wrong to describe it as a airbnb issue. Doesnt matter what the channel is. Its any non-lease short stay arrangements in the Sydney area....Waiting to see how they define that....Unlike to be the City of Sydney. More like Sydney basin....wonder where the border will be.

    The obvious losers are strata properties where there is opposition to shortstays. The Govt has just armed the rebel whiners with ammo to shoot on sight. Vigilante owners corporations and committee members will be like a kangaroo court mob.

    Could see some rents rise if supply falls. And a oversupply for other property if it hits the lease market.

    Winners will be private property and those with an owner-occupier who will now have a more secure position.

    Like anything there are always those who seek to operate illegally. The ability to enforce and the true extent of penalties are yet to be seen or tested. But if you have vigilante strata members doing the detective work cant be too hard to get caught.
     
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  9. Christina46

    Christina46 Well-Known Member

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    Not sure what you mean by this? Can the Strata allow short term beyond the 180 days? Hard to see whole buildings of shortstay if the 180 day limit still applies??
     
  10. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    The stratas that hate Airbnb will be vigilant and basically outlaw even 1 day.
    A strata committee that like shortstays wont give a toss. There are some building which are 100% shortstay. Unlikely they will find a complaint if they all agree they think the building is compliant. Stratas dont need to check compliance, mere suspicion is enough to report. Wonder how Fair Trading would determine 180 days is proven to be exceeded if owner has two listings (Airbnb and Stays) under two names. They produce part records. Bingo.

    The key trigger for these laws is complaints and vigilant neigbours. Otherwise its self regulating. Like a ban on smoking on balconys. If everyone smokes.....
     
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  11. Lacrim

    Lacrim Well-Known Member

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    Wait a sec I had a brain short circuit - what I meant was an increase in rental supplyo_O
     
  12. Simon Hampel

    Simon Hampel Founder Staff Member

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    So on one hand the NSW Govt encourages retirees to increase their income by becoming Airbnb hosts ... but now turns around and says they can only do it for 3 days a week or so :rolleyes:

    EDIT: read an article which says "New planning laws will impose a 180-day cap on properties used for Airbnb-style letting in greater Sydney when hosts are not present" ... which is not really what the NSW Govt is encouraging - if they accept the "Airbnb a room" (ie traditional bnb style), then that's not going to cause such a problem.
     
  13. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Apparently Fair Trading will seek access to platform and agent data in real time and penalties $1.1m for a company and $220K for an individual.
     
  14. Gockie

    Gockie Unicyclist Premium Member

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    I suppose some buildings will be very airbnb friendly and others won't. So if you wanted to continue to airbnb whole properties, you'd have to choose the airbnb friendly buildings.

    Me... I've been airbnbing 3.5 years and it's been profitable. I'd probably switch to full time normal leasing though if it comes into play and my strata decides it's not for this building. Or consider executive lets (or does that fall into the same category?). I suppose there would be a sell off of a lot of furniture and furnishings from short term let owners too. And I may finally put a granny flat up in the yard....
     
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  15. Ted Varrick

    Ted Varrick Well-Known Member

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    Paul, in NSW Strata Committees cannot pass (or implement) by-laws, only Owner's Corporations can.
     
  16. Ted Varrick

    Ted Varrick Well-Known Member

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    Paul, meth labs and brothels are obvious losers too, because Strata Committees, Owners Corps, owner occupiers, and long term tenants whom you describe as "rebel whiners", "vigilantes" and a "kangaroo court mob" might actually consider that "democracy" (yeah, I know, you say tomato...) prevails in a strata owners corporation for the best interests of the building.

    And who regard blatant breaches of the NSW Strata Management Act to be completely out of order, and so some amateur gig-economy hoteliers after some filthy lucre can ply their trade somewhere else.

    Maybe in their own home or neighbourhood.
     
  17. Ted Varrick

    Ted Varrick Well-Known Member

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  18. Biz

    Biz Well-Known Member

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    How am I supposed to run my illegal brothel now :(
     
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  19. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    You know what I meant. Pedantic. Really.
     
  20. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Still trying to interpret what "amateur gig-economy hoteliers after some filthy lucre can ply their trade somewhere else." means.

    Bored.
     
    Last edited by a moderator: 6th Jun, 2018