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Short–term holiday letting

Short–term holiday letting (STHL) relates to the renting of the whole or part of a private home to a visitor on a commercial basis.

 

Given the recent growth in STHL, the NSW Government has been investigating policy options for the activity in NSW. This included inviting feedback on an Options Paper for short–term holiday letting in NSW (Pdf, 4.0 MB)

 

short term holiday letting family with sons on coastal beach

 

Government position on Short–term holiday letting

On 5 June 2018, the Minister for Planning and the Minister for Better Regulation and Innovation announced a whole–of–government approach to regulating STHL in New South Wales. You can view the Ministerial Media Release at Short–Term Holiday Letting Plan A Win–Win.

 

Through a state-wide planning framework and mandatory industry self-regulation, the approach will enable STHL, while also managing impacts on communities.

 

The Department of Planning and Environment and the Department of Finance, Services and Innovation (DFSI) are now working to implement the government policy.

 

The new planning framework will simplify and clarify the planning regulation of STHL in NSW, by providing:

  • a single definition for the use
  • clear pathways for approval. Specifically:
  • when the host is present on-site overnight, STHL will be allowed as ‘exempt development’ all year,
  • when the host is not present on-site overnight, STHL will be allowed as ‘exempt development’ with a limit of 180 days for hosts in Greater Sydney and 365 days in all other areas of NSW,
  • councils outside Greater Sydney will be able to decrease, through their local environmental plans, the 365 day threshold to no lower than 180 days per year and
  • certain planning rules will apply to properties on bushfire prone land.

 

This new policy has not yet been implemented and until this time the permissibility and operation of STHL remains at the discretion of local councils. Communities are encouraged to contact their councils for provisions for STHL in their local government area.

 

A mandatory Code of Conduct will also be introduced that will apply to anyone involved in providing or using STHL including hosts, guests, online booking platforms, and letting agents. DFSI will administer and enforce the elements of the Code.

 

For information regarding the mandatory Code of Conduct and strata regulations, visit the NSW Fair Trading website or contact the Department of Finance, Services and Innovation.

 

short term holiday letting plan a win win all screens 835x373

 

Options Paper on Short–term holiday letting

Options Paper on Short–term Holiday Letting in NSW (PDF, 4.0 MB), released on 21 July 2017, was on exhibition until 31 October 2017. There were a number of options considered through the options paper including; greater industry self–regulation, registration or licensing of short–term holiday letting operators, changes to strata laws and regulation through the planning system.

 

The submissions made in response to the options paper can be viewed at the Department's Plans and Policies website.

 

Frequently asked questions

STHL has been carried out in coastal and other tourist destinations in NSW for many years, often without planning approval or incident. Internet platforms have generated new marketplaces for STHL, benefiting consumers and providers by lowering transaction and accommodation costs, providing opportunities to earn income from unused assets and broadening the economic benefits of tourism.
 
STHL can be considered as the renting of the whole or part of a private dwelling to a visitor on a commercial basis, whether the host is present or not. There is currently no consistent definition of STHL under the NSW planning system.

STHL can provide significant economic benefits to local, state and national economies. The popularity of online booking services and the growth of the shared economy has seen STHL expand in Australia and overseas. Per the Parliamentary Inquiry Report, a study by BIS Shrapnel estimates STHL contributes $31.3 billion to the national economy including upwards of 238,000 jobs.1 Given the size of the economy of NSW, a significant portion of this activity takes place in NSW. NSW (including the ACT) represents approximately 35% of holiday rental premises nationally.2

 

The rapid growth of the industry has led to the need to consider whether improved regulation of STHL is required, to enable the activity to continue to take place without unduly impacting on local communities, the safety of visitors or introducing unnecessary red tape.

 

1Parliamentary Inquiry Report, October 2016, p 42.

2Parliamentary Inquiry Report, October 2016, p 23.

STHL is currently regulated in some local government areas through the planning system. Councils can generally determine the land use planning controls for STHL through their Local Environmental Plans (LEP), few LEPs in NSW refer specifically to STHL.

 

The LEPs that do address STHL use different definitions and thresholds for when STHL requires development consent.

 

These LEPs either:

  • allow the use without the need for any approval,
  • define STHL as tourist and visitor accommodation within residential accommodation and set a maximum number of consecutive days that STHL can occur,
  • define a maximum number of bedrooms allowed as STHL and
  • define thresholds for days and bedrooms beyond which a more detailed level of approval from a council is required.

In 2016, the NSW Legislative Assembly Committee on Environment and Planning conducted an inquiry into the Adequacy of the Regulation of Short–term Holiday Letting in New South Wales.

 

Three public hearings were held between March and May 2016 and 212 public submissions were received.

 

The Committee’s final report was published on 19 October 2016 and made 12 recommendations. The full report can be found at the Parliament of NSW website.

 

The key recommendations were that the NSW Government:

  • amend planning laws to regulate short–term holiday letting,
  • allow home sharing, and letting a principal place of residence, as exempt development,
  • allow empty houses to be let as exempt and complying development,
  • strengthen owners’ corporations’ powers to manage and respond to issues in strata properties.

 

The NSW Government supports STHL occurring in NSW and provides an appropriate balance between supporting the economic value of the industry and managing social and environmental impacts of the activity.

Following a Parliamentary Inquiry and consultation on different options, the NSW Government released a statement, on a whole of government regulatory framework on STHL.

A state-wide planning framework will now be developed by the Department of Planning and Environment. Other elements of the whole of government framework will be progressed by the Department of Finance, Services and Innovation (DFSI) separately.

 

Please contact DFSI regarding fair trading legislation, STHL in strata settings and the industry Code of Conduct.

 

Where can I find out more?

 

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Page last updated: 13/07/2018