Short-Term Rental Accommodation Incentive Scheme: WA to Pay Airbnb Owners to Rent Homes Long-Term
To boost housing supply and the long-term rental market in WA, the State government proposed several solutions, one of them being offering attractive incentives to short-stay owners for offering their property to the long-term residential market.
“Short-term rental accommodation remains an important part of Western Australia’s tourism offering. However, it is impossible to ignore the impact this increasingly popular type of accommodation has had on some local neighbourhoods and communities,” said Premier Roger Cook when asked about the incentive scheme.
With the number of long-term rentals diminishing every year, local governments are proposing to utilise short-stay accommodation for long-term tenants with a substantial $10,000 incentive aimed at property owners.
If you would like to consider alternate strategies for your investment properties, here’s everything you need to know about the Short-Term Rental Accommodation Incentive Scheme!
What is a Short-Term Rental Accommodation?
Short-term rental accommodation (STRA) is the formal name given to short-stay rentals such as holiday homes, apartments, or units which are usually provided for rent to customers on online booking platforms. Essentially, it is any rental accommodation that you can find on Airbnb.
These short-term rentals are set in regional and residential areas, and they are typically un-hosted, which means the property owners do not use or interact with the tenant
Properties rented from short-stay booking platforms are generally rented for the interim of a day, week, or month by month. Long-term rental accommodation, on the other hand, could be rented for a 12-month period (or more in some cases).
The Western Australian long-term rental market is facing decreasing supply of properties available to long-term tenants, and this is why the government will attempt to transition short-stay rentals, starting in 2024.
Short-Term Rental Accommodation Incentive Scheme: What Is It?
The Cook government is presenting a solution to increase housing supply: providing an STRA incentive scheme, which entails allotting $10,000 to all STRA property owners, encouraging them to advertise their short-term rentals as long-term tenants. With time, this transition should boost housing supply and effectively add more long-term rental properties to the tight market.
“There is a need to ensure that there are sufficient and affordable houses on the long-term rental market while recognising STRA plays an important role in the tourism accommodation sector, which is of critical importance to many regional communities in WA,” commented Treasurer Rita Saffioti on the new regulations.
The STRA incentive scheme, which will be on offer for a six-month period, is expected to make registration and planning changes to all un-hosted STRA properties. By the end of next year, it is expected to expand and encourage all property owners to rent out properties in return for favourable incentives, not just the currently eligible STRA owners.
How to Qualify for Short-Term Rental Accommodation Incentive Scheme
To be eligible for the STRA incentive scheme, you must fulfil the following requirements:
- You must be a property owner with a self-contained flat, unit, or apartment.
- You must have advertised your property on a booking platform as un-hosted short-term rental accommodation six weeks prior to the 9th of November 2023, which is the date on which the new STRA incentive scheme was announced.
- You must transition your property from short-term to long-term rental accommodation by midnight on 8 May 2024.
- You must have a working Australian bank account that can receive transfers.
- You must consent to entering a 12-month residential tenancy agreement. The rent should also not surpass the maximum rent chargeable by location.
Short-Term Rental Accommodation Incentive Scheme Disqualifications
On the other hand, you will not be eligible if:
- You won’t rent the entire property – for instance, you are renting only parts of it, like a room.
- The property is not legally yours.
- Six weeks prior to the announcement of the STRA incentive scheme, your property was one of the long-term residential tenancies during that period.
What is the application process?
If you have an un-hosted STRA property and want to join this incentive scheme, you will first need to go through a formal application process. Property owners must submit an Expression of Interest (EOI). Once that is done, Consumer Protection should contact you to provide further information on which documents you should have readily available.
With the formal application process expected to start by mid-2024, there is little time for individual property owners to start submitting their property forms.
In the Perth metro area, planning requirements will be different than other regional areas. STRA property owners will need to provide development approvals for un-hosted short-term rental, accommodation which will be up for rent for 90 nights in 12 months. However, if the property will not be operating for more than 90 nights, owners do not need to obtain development approval.
For regional areas, any local government approval will be determined by said governments.
What supporting documents are required?
You will also need to provide a number of documents on your application, such as a copy of your residential tenancy agreement. Ensure that the rent timeframe and the maximum rent chargeable match with the SATRA incentive scheme criteria.
To qualify the status of your STRA accommodation, you might also need to submit a copy of the property’s planning approval as well as the booking platform agreement that further confirms the rent period. We project that you will need to give a copy of a transaction statement issued by your booking platform.
A Two-Stage Payment Process
Once you are an approved STRA property owner for the incentive scheme, you will receive $4,000 from Consumer Protection, then you will receive the remaining $6,000 when rental tenancy marks the 12-month period.
Why is Western Australia pushing for the STRA Incentive Scheme?
“These reforms are a balanced approach in providing greater regulation of short-stay accommodation across the State and provide an incentive for property owners to move their short-stay properties to the long-term private rental market,” said planning minister John Carey in an answer to this question, but let’s break this down:
Housing Issues
The housing supply issue is still present, and the STRA reforms were designed to address this issue. The aim is to manage the rising demand for affordable houses. With the number of available houses in Perth plummeting to less than 1%, the STRA scheme and the Cook government’s ongoing efforts are directed towards combating these drastic numbers.
Governmental Reforms
The Cook government recognises the popularity and impact of short-term rental accommodation; hence, the reforms done to change the utilisation of such properties.
The government also aims at initiating a state-wide registry for all STRA properties, so a similar scheme to this SATRA initiative is likely in the way to further uplift the number of available long-term rentals.
Be aware of Residential Tenancy Regulations
Last but not least, you must ensure to cover your bases when entering any residential tenancy agreement. First, make sure that your agreement aligns with the Residential Tenancies Regulations 1989 (WA) and Residential Tenancies Act 1987 (WA).
You must also ensure that you are issuing reasonable rent chargeable. Do not forget to check your local government’s maximum rent chargeable and that your rent does not exceed the amount.
Consumer Protection in WA has renting tools and checklists that can assist you if you are still learning how to manage your property.
It goes without saying that keeping up-to-date with the latest news and governmental reforms is paramount in order to ensure that you comply with government schemes and make the most of the incentives!
Want to discuss switching your investment property to a long-term rental?
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