Reading time: 5 minutes

With the influx of apps such as Airbnb and HomeAway, becoming a host for a short-term holiday has never been easier. Short-term holiday letting has several advantages over traditional hotels:

  • cheaper rates;
  • better home amenities such as a washer and dryer; and
  • a more personalised touch from the hosts.

However, both hosts and guests should be aware of the industry regulations. The NSW Government recently released an Options Paper on short-term holiday letting, which may lead to changes to the law. This article discusses the current state of the industry in NSW and the implications of the Options Paper.

Short-term Holiday Letting Defined

A short-term holiday in a residential home is a stay that’s under three months. In contrast, a rental of over three months will fall under the scope of the Residential Tenancies Act 2010 (NSW). This imposes strict restrictions on both landlords and tenants.

To meet the legal definition, short-term holiday letting must take place in a residential or holiday home. The definition does not include stays in hotels, motels, hostels and nursing homes.

Short-term holiday letting will involve the guest renting either:

  • one or more rooms with the host present;
  • a whole house or unit with the host away;
  • a holiday dwelling with the host away; or
  • a home solely reserved for short-term renting.

The Current Law in NSW

Different local councils have different laws in their environmental plans for short-term holiday letting. There is no state-wide standard law. Councils either:

  • allow owners to let their homes without any oversight;
  • set a maximum number of days on short-term stays; or
  • prohibit short-term holiday letting entirely.

For example, as of 2017, the City of Sydney Council considers short-term rental accommodation to be tourist and visitor accommodation. The Council bans this in most residential areas.

In strata (apartment) complexes, residents rely on neighbours’ cooperation in order to rent out their homes. They will generally stop if neighbours complain. The owners corporation may also set further specific by-laws for the whole complex. For example, these by-laws may prohibit subdivision of rooms or set a maximum occupancy per unit.

Possible Reforms

The Options Paper considered the current state of short-term holiday letting regulation and the potential policy reforms. It looked at five factors. 


Factor Explanation of Issue
Noise A very frequently raised amenity issue, due to the potential for guests coming and going at odd hours.
Party houses The paper noted that in Queensland, legislation allows local councils to declare a ‘party house’ to require approval prior to allowing any tenants
Waste Waste generation may be higher for holiday tenants than long-term residents as perishable items may be disposed of at the end of their stay
Traffic and parking The higher proportion of adults occupying holiday rentals may cause issues with limited parking space
Hazards and evacuation Tenants may not be familiar with procedures for any hazards that require evacuation of the building


Furthermore, these issues have bigger impacts on strata complexes due to the proximity of neighbours and reliance on shared facilities. For example, excess noise will affect more residents and lifts may have to serve more people. 

The Options Paper then considered four ways of managing these issues:

  1. Industry self-regulation
  2. Amendments to strata laws
  3. Planning regulations
  4. Host registration

Industry Self-regulation

The Options Paper advocated that the industry could take greater responsibility and self-regulate. In most cases, hosts operate without incident or complaints. This suggests that government intervention is unnecessary. However, effective self-regulation will require a unified industry body and the ability to enforce compliance with codes of conduct.

The Options Paper also acknowledged the existence of the Holiday Rental Code of Conduct. However, the Paper criticised the Code for being too narrow, with confusion surrounding its legal status. The Paper recommended that a complaint mechanism should be inserted into the Code. It also recommended further monitoring and reporting by the industry.

Amendments to Strata Laws

The Options Paper considered whether owners corporations should be given greater ability to manage the impacts associated with holiday letting. For example, owners corporations could adopt model by-laws to better manage the impacts.

The Paper also considered that NSW strata laws could be amended. For example, to make the owner and the occupants jointly and severally liable for the conduct of the occupants. Amendments to laws could also make it easier to enforce by-laws. 

Planning Regulations

The Options Paper highlighted that there was still no consistent definition of short-term holiday letting across NSW.  To address this problem, it recommended that local council environmental plans be more consistent in how they:

  • define short-term holiday letting;
  • address the allowed length of stay; and
  • limit the number of rooms that can be let. 

Host registration

Finally, the last option suggested was to require hosts to register with a government agency. The could require hosts to adhere to a code of conduct in order to maintain their registration. 

Key Takeaways

Hosts looking to let out their homes or businesses looking to run a service in the industry should be aware of any local council regulations and environmental plans that may apply. The NSW Government is also looking for a better way to regulate short-term holiday letting. While more consistent regulations will benefit businesses in the industry, the Government is also looking to implement further restrictions, particularly on hosts. 

If you’re a short-term holiday host or industry organisation and need advice on your legal obligations, call LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.


How to Sponsor Professionals For Your Healthcare Organisation

Thursday 24 March | 11:00 - 11:45am

Plug skill shortages in your healthcare organisation by sponsoring professionals from overseas. Learn how in our free webinar.
Register Now

Everything You Need to Know about SaaS Agreements

Thursday 7 April | 11:00 - 11:45am

Understand which contracts will protect your SaaS contract from risk, and how. Register for free today.
Register Now

What to Consider When Buying a Tech or Online Business

Wednesday 13 April | 11:00 - 11:45am

Learn how to get the best deal when buying a tech or online business. Register for our free webinar today.
Register Now

Corporate Governance 101: Responsibilities for New Directors

Wednesday 27 April | 11:00 - 11:45am

If you are a new company director, join our free webinar to understand your legal compliance obligations. Register today.
Register Now

Rogue Directors and Business Divorces: How to Remove a Director

Thursday 28 April | 11:00 - 11:45am

Removing a board director is not simple. Join our free webinar to learn how to handle rogue directors. Register today.
Register Now

Employment Essentials for Tech Businesses

Thursday 5 May | 11:00 - 11:45am

Protect your tech business and your employees by understanding your employment legal obligations. Register for our free webinar today.
Register Now

How to Protect and Enforce Your Trade Mark

Wednesday 11 May | 11:00 - 11:45am

Protect your business’ brand from copycats and competitors. Register for this free webinar to learn how.
Register Now

How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer