How to Start a Holiday Rental Business in Australia

In this guide, we will break down everything from legal essentials to listing tips so you can fully understand how to start a short-term rental business in Australia. If you are an aspiring short-term rental host in Australia, you must thoroughly research the markets. Most first-timers pay attention to market demand, expected earnings, and other cost and profitability aspects. And all these are great. But there is more to them than meets the eye.

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Whether you have a spare room or an investment property, this article will help you avoid newbie pitfalls and stand a good chance of getting your short-term rental business off to a good start.  

Your Pre-step: Understand local regulations and legal requirements

Starting a short-term rental business sounds exciting - but before you jump in, it’s essential to understand the legal landscape. Australia doesn’t have a one-size-fits-all rulebook for short-term rentals (STRs) - regulations vary greatly by state, and even by local council.

Here’s a quick overview of what you need to know across some of Australia’s most popular short-term rental markets:

Sydney, NSW

• Mandatory registration: All STR properties must be listed on the NSW Government’s STRA register.
  
  • Cost: $65 (initial), $25 per year after.
• Night cap: Non-hosted stays (when you're not living on-site) are limited to 180 nights/year in many metro areas.
• Safety requirements: Smoke alarms, fire safety compliance, and clear exits are non-negotiable.
• Tax note: All short-term rental income is taxable and may affect CGT if it’s your primary residence.

Melbourne, Victoria (VIC)

• Short-Stay Levy: Effective January 1, 2025, a 7.5% levy applies to short-term accommodations of less than 28 consecutive days (State Revenue Office Victoria)
• Exemptions: The levy does not apply to hotels, motels, caravan parks, or accommodations booked for 28 days or longer.

Brisbane and Gold Coast, Queensland (QLD)

• Council Regulations: Local councils may require development approvals for STRA, especially for un-hosted properties.
• Gold Coast Specifics: Hosts must apply for a Short-Term Rental Accommodation Permit from the Queensland Department of Tourism, Innovation, and Sport. ​

Perth, Western Australia (WA)

• Planning Approval: Un-hosted STRA exceeding 90 nights per year require planning approval. ​(WAPC)
• Registration: A statewide STRA register is set to commence on January 1, 2025.

Byron Bay, New South Wales (NSW)

• Night Limits: Certain areas have stricter caps, limiting non-hosted STRA to as few as 60 nights per year (Byron Shire Council)
• Registration Requirement: Mandatory registration with the NSW STRA Register (NSW Planning) ​

Understand your tax duties

The other most important consideration is your obligations under the STR income tax laws in Australia. Any income you earn from a short-term rental property is taxable and must be declared to the ATO. You can usually claim expenses (from cleaning to mortgage interest) to offset some income, but it is wise to keep good records or speak to an accountant. Always stay current with the tax twist. For instance, renting out part or all of your primary home might affect your capital gains tax (CGT) exemption. In Australia, your main residence is normally CGT-free when you sell, but if you have been renting it, you could owe CGT on the portion of time/space it was rented.

Prepare your property to welcome guests

Before your short-term rental is ready to welcome guests, you need a holiday rental checklist. You want to always start with the basics and then stock up on the amenities that travellers expect. Data shows that guests often filter for popular features like Wi-Fi, a pool, a kitchen, free parking, and air conditioning. Use the checklist table below to assess if your property is ready to delight your first visitors.

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No property? No problem! You can still start an Airbnb business, check out our guide for more info.

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How to list your space like a pro

So, how do you become a short-term rental owner with an outstanding listing? It all starts with creating your listing and showcasing your space in the best possible way. Knowing how to set up a profile will help you attract guests from day one. Here are some pro tips to get your listing up to par:

Photography is key

Bright, high-quality photos are a must to grab attention.  Shoot in the daytime with plenty of natural light for a warm, inviting look. You should also take shots from multiple angles and highlight unique spaces.

Write a compelling description

Guests often scan for key features, so lead with the best bits about your place. Focus on what makes your space special (e.g., “enjoy sunsets on the balcony” or “minutes from the Sydney Opera House”).  Always be honest; do not oversell, or you might set guests up for disappointment.   

Set clear house rules

Every great host is upfront about the rules of the house. On short-term rental platforms, you can select standard house rules, like whether pets are allowed, if smoking is OK, and if there are quiet hours. Think about what is important for you and your neighbours’ comfort. No parties or events? State it. Require shoes off indoors or have areas off-limits? Let guests know in advance.

Highlight your amenities and perks

Make sure to highlight the standout amenities in your listing. If you have a fabulous garden, a high-speed Wi-Fi mesh, or a premier kitchen, show it in photos and mention it. These details can sway a guest's choice between listings. Also, list all the basic amenities you offer in the platform’s amenities section.

Introduction to pricing: Don’t just set it & forget it

Setting the right nightly rate is a crucial step when starting a short-term rental business in Australia. Strategic pricing can mean the difference between a handful of bookings and a calendar full of happy guests. The short-term rental market tends to fluctuate with seasons, weekends, and local events, so you will want to adjust your rates regularly.

If you price too high, you might deter otherwise eager guests; if you price too low, you leave money on the table . The key is to find that ideal price and tweak it over time.

How to set up smart pricing without the guesswork

If you are worried about pricing your listing, you do not have to do it all manually. Modern pricing tools can do the heavy lifting by automatically adjusting your rates based on demand and local events. 

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For example, Beyond is a popular choice. It analyses tons of data to set optimal prices, and hosts who use it have increased revenue by an average of 40%. Beyond’s free analyser tool uses a billion+ data points to show you competitive nightly rates and projected income for your listing with one click. Sign up today with Beyond to try out the free listing analysis tool and you’ll have taken the guesswork out of your pricing strategy.  

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