A local government move to designate short-stay rentals as commercial properties has raised questions over whether such properties should be treated as businesses. \u00a0<\/p>\n
The City of Mount Gambier, in the South Australia’s South East, has proposed designating short-term accommodation properties as commercial properties, rather than residential.\u00a0<\/p>\n
It would mean a steep rate rise for owners if the changes passed, with commercial rates to be set at 250 per cent of residential properties at the start of the 2026\u201327 financial year.\u00a0<\/p>\n
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Mount Gambier is South Australia’s second-largest city and the main economic centre of the Limestone Coast region. (ABC South East SA: Bec Whetham)<\/p>\n
This would fall to 200 per cent across the next three years as part of a wider move to lower rates for businesses in the town.\u00a0<\/p>\n
Council corporate and regulatory services general manager Jane Fetherstonhaugh said it was a fair way to recognise the properties’ profit-earning ability.\u00a0<\/p>\n
“These properties operate as a commercial enterprise,” she said.<\/p>\n
“They generate income and place higher demand on infrastructure and social services, similar to any hotel or motel.\u00a0<\/p>\n
“This change just ensures some fairness on how rates are applied across those different types of accommodation providers.”<\/p>\n
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The City of Mount Gambier, like many councils in Australia, does not know how many short-stay rentals there are in its jurisdiction. (Reuters: Dado Ruvic\/Illustration)<\/p>\n
The commercial rate would only apply to properties rented out for more than half the year and where more than 50 per cent of the property was used for short-stay accommodation.\u00a0<\/p>\n
“We don’t think it’s going to impact the tourism sector,” Ms Fetherstonhaugh said.\u00a0<\/p>\n
The council’s proposed changes are open for public consultation.\u00a0<\/p>\n
‘Money grab’<\/p>\n
Short-stay rental owner Jenny Bickley said the proposal would result in increased costs for owners, which would be passed on to customers.\u00a0<\/p>\n
She said the move was a “money grab”.\u00a0<\/p>\n
“There will be people that either sell or the pricing will just go up,” Ms Bickley said.<\/p>\n
“You don’t make that much money and you have to put your prices up straight away and that’s going to negatively affect all the tourism we have.”\u00a0<\/p>\n
Ms Bickley said council’s reasoning that short-term rentals were making a profit was unfair.\u00a0<\/p>\n
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Jenny Bickley says the short-stay sector plays a role in tourism and providing housing for transient workers.\u00a0 (ABC South East SA: Sam Bradbrook)<\/p>\n
“I’ve run my business here in Mount Gambier for 30-plus years and I have worked from home the entire time and made money working from home,” she said.\u00a0<\/p>\n
“Why is short-term targeted and not just anybody who is earning an income from a home?”<\/p>\n
Consistency sought\u00a0<\/p>\n
The Adelaide and Unley councils in South Australia and Brisbane City Council in Queensland have made similar changes to their rating structure.\u00a0<\/p>\n