Short-Term Rental Regulations in Melbourne

Melbourne, Australia's second-largest city, has a large and growing short-term rental market driven by tourism, business travel, and major events. The regulatory environment is shaped primarily by the state of Victoria's approach to STR regulation, which differs in some respects from the framework in New South Wales. Melbourne's high concentration of apartment towers in the CBD and inner suburbs makes the management of short-term rental activity in strata buildings a particularly prominent issue.

Current Regulatory Framework

Victoria's approach to short-term rental regulation has evolved in recent years. The state government introduced reforms to the Owners Corporations Act (the Victorian equivalent of strata legislation) that empower owners corporations to pass rules limiting or prohibiting short-term stays in their buildings. This was a major change, as it gave building communities a direct mechanism to control STR activity.

Unlike NSW, Victoria has not implemented a statewide day cap on short-term rentals or a mandatory state-level registration system for STR hosts (as of early 2025). The regulatory approach instead relies more heavily on planning controls, building-level governance through owners corporations, and general compliance with existing laws around noise, safety, and building use.

Local councils in Melbourne have some powers through their planning schemes to regulate accommodation uses. However, the interpretation of whether a short-term rental constitutes a "dwelling" use or an "accommodation" use under the planning scheme can be complex and has been the subject of debate and legal interpretation.

Key Requirements

• Owners corporations in Victoria can adopt rules that restrict or prohibit short-term stays in their buildings
• Properties used for short-term accommodation must comply with local planning scheme requirements, which vary by zone and council area
• Operators must comply with building and fire safety requirements applicable to the property type
• All rental income is subject to Australian income tax and potentially GST if the operator's turnover exceeds the threshold
• Hosts are responsible for ensuring compliance with noise regulations and other local laws that apply to all residential properties
• Consumer protection laws require accurate advertising and compliance with guest safety obligations

Enforcement

Enforcement of short-term rental regulations in Melbourne relies on a combination of building-level governance, local council action, and complaint-driven processes. Owners corporations that have adopted STR-restrictive rules can enforce them through the Victorian Civil and Administrative Tribunal (VCAT), which can hear disputes about breaches of owners corporation rules.

Local councils can take enforcement action if a property's use as short-term accommodation breaches the applicable planning scheme requirements. However, the resources dedicated to proactive enforcement vary by council, and many rely primarily on complaints from neighbors.

The absence of a mandatory registration system at the state level means there is less systematic monitoring of STR activity compared to jurisdictions like NSW. This makes it harder for authorities to track the scale and location of short-term rental operations and to identify non-compliant operators.

What This Means for Long-Term Renters

For long-term renters in Melbourne, the regulations mean that building-level rules are the most important factor in determining their exposure to STR activity. In apartment towers where the owners corporation has adopted restrictive rules, the level of short-term rental activity is likely to be lower and better managed. In buildings without such rules, STR activity can be dense, particularly in the CBD and inner-city suburbs like Southbank, Docklands, and South Yarra.

Melbourne's large stock of high-rise apartment buildings in the CBD and Southbank area has been particularly affected by short-term rental activity, with some buildings hosting substantial numbers of tourist guests alongside long-term residents. The impacts, including noise, security, and amenity pressure, have been well documented and have driven the push for owners corporation powers to regulate.

Long-term renters should check whether the owners corporation of their target building has rules addressing short-term stays. They should also research the building's reputation and speak with existing residents if possible. Buildings with active, engaged owners corporations tend to provide a better living environment for long-term residents, regardless of the broader regulatory picture.

How BnBDetector Helps

Victoria has no statewide registration system, so there is no public database of STR activity. BnBDetector fills that gap by showing you which CBD and inner-suburb towers have heavy short-stay traffic and which ones are residential.

Disclaimer

This information is provided for general informational purposes only and should not be considered legal advice. Regulations change frequently. Always verify current rules with local authorities before making housing decisions.