Australia’s rental market has a unique quirk that has left expatriates and tourists alike scratching their heads.
A recent article from Escape highlighted that Australians have a habit of renting out their rooms while they travel, a practice that seems baffling to expatriates in Australia.
“In Australia, you go away for one week and you put a message, ‘I’m renting my room.’ You leave your things to the side and you let someone take over your room,” noted a Spanish expat.
This practice is not just about making extra money; it’s also about ensuring you have a place to return to without re-entering a competitive rental market. With rental prices soaring, this strategy has become a practical solution for many Aussies.
As of December 2023, there were approximately 278,788 unique short-term rentals listed in Australia. This number has increased from pre-pandemic levels but remains significant.
Rulings on short-term lets in Australia
Short-term rentals in Australia are regulated differently across states and territories. If it’s something you’re interested in, it can be useful to:
- Check local regulations: Each state has its own rules regarding short-term rentals. For example, in New South Wales, you may need to register your property if you rent it out for more than 21 days a year.
- Get permission: If you are renting, ensure your lease allows subletting. Landlord approval is often required.
- Insurance: Consider getting insurance that covers short-term rentals to protect against potential damages.
- Tax considerations: Australia treats rental income uniformly, regardless of whether it’s short-term or long-term. If you’re not running a business or renting commercial premises, tax treatment remains the same.
By understanding and following these guidelines, you can take advantage of Australia’s unique rental culture and make the most of your travels.
Could you make a little extra cash from short-term rentals in Oz?
How to do it
Foreign buyers are limited in terms of the types of property they can buy in Australia. They can purchase new properties or vacant land for development, but generally need FIRB approval to buy existing residential properties.
If you’re looking to buy a new-build property and make an income from short-term lets, it’s important to check that this is allowed in the initial contract. Read more about the current regulations here.
For guidance, speak to an independent property lawyer,
If you’re looking to rent a property and let it out when you’re not there, that’s entirely possible, however, as mentioned above, make sure you let your landlord know your intentions.
How to advertise your short-term let
According to Escape.au, lots of renters are advertising their bedrooms on Facebook for periods as short as one week, while they jet off travelling, be that in Australia or overseas.
Depending on where you live, there will likely be pages dedicated to this on Facebook. A quick search shows numerous groups for short-term lets in each of the most popular cities.
For guidance on the tax you’ll pay in Australia, speak to a local private wealth manager or an independent financial advisor there. Your UK or US-based IFA cannot advise you on Australian tax regulations.
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