Tasmanian visitor tax on short-stay accommodation defeated in upper house

A Tasmanian government push to introduce a visitor tax on short-stay accommodation has been defeated in the state's upper house, with Labor and multiple independents voting it down.

The short-stay levy was a 2024 election promise and was supposed to partially pay for the two-year exemption on stamp duty offered to first home buyers.

That exemption has now ended, and it seems the money would've instead gone into general government revenue.

Initial estimates from the government were that the levy would raise about $11 million per year, but the government revised that figure to $8 million after amendments.

Abetz chastises levy opponents

In a statement, Treasurer Eric Abetz accused Labor of "hypocrisy".

"The Tasmanian government's modest 5 per cent short stay levy, which would have been paid for overwhelmingly (over 80 per cent) by interstate and international visitors, has been voted down by Labor," he said.

"The Tasmanian government took this commitment to the election. It has been consulted on over years. It had strong protections for hotels, motels, inns and other similar commercial accommodation.

"Labor voted against it. Labor's choice for treasurer, Ruth Forrest, voted against it. They cannot have it both ways: calling for fiscal responsibility then voting down sensible revenue measures which would have supported first home buyers paid for by non-Tasmanians.

Few were complimentary about the bill during the debate, including those who ultimately supported it.

Labor MP Luke Edmunds said the bill was not fit for purpose and "doesn't contribute to solving the rental crisis or housing affordability".

"This bill would levy money from the regions and spend it on first home owner schemes known to perpetuate the housing affordability problem by amplifying demand but not supply," he said.

He called on the government to "consult properly, do some modelling and bring back a policy that actually improves housing outcomes".

"As others have said, I think this policy is risky and poorly thought out. It's detrimental to tourism in our regions and it already has many unintended consequences.

Greens MLC Cassy O'Connor said she recognised that it was "highly political" and "that it will do very little, if anything, to ease the reality of the housing crisis, the availability of affordable housing".

But she said the Greens would support it as a revenue-raising measure.

"We recognise that this is the government pretending that it's doing something to rein in short-stay accommodation, an issue that they've failed to get on top of ever since it surfaced in Tasmania, an issue that they have abandoned councils on as well," she said.

"But we made the decision to support this bill because it is a revenue-raising measure and, at the moment, the state needs to raise all the revenue that it can and to make all the efficiencies that it can without impacting on the delivery of services in Tasmania."

Independent for Murchison Ruth Forrest told parliament she had initially welcomed the government's promise because it would raise money for the state.

"We've got a real budgetary problem here, we need to raise revenue and thank God they're actually looking at a new tax. And it is a tax, let's face it," she said.

"Members will be well familiar with my consistent position on the state's fiscal position.

"Tasmania's own-source revenue as a share of total expenditure is at historic lows. Treasury, in their fiscal sustainability report of 2026, made it really clear: we need to pull all three levers, and one of them is raising revenue.

But she said she was concerned about a lack of modelling, how much of the tax would ultimately be on Tasmanians and where the money was being directed.

"This won't fix the housing crisis. It won't," she said.

In the end, Ms Forrest voted against the levy.

Independent for Nelson Meg Webb said there was an "incontrovertible lack of clarity about the intent of this bill".

"It just needed to sound like it might be something that appealed to average Tasmanians out in the street as a reasonable thing to do. It had to present well as a social media tile, or grab."

And like many others, Ms Webb was concerned about the fact it was unlikely to address the housing issue.

"My wish would be that we would be talking about a piece of legislation and policy that was there to deliver an improvement in our absolutely catastrophic housing crisis in this state," she said.

"We see a race to the top of rents because of excessively low vacancy rates that are so far below market failure, it's a joke really but it's not a joke because it's people's lives, it's people's wellbeing and health and livelihoods and access to a reasonable life in this state that is the victim of this situation we find ourselves in."

'A bit of a hot mess'

The Upper House's newest member, Independent for Huon Clare Glade-Wright, said that as the cost would be borne by the visitor, not the homeowner, there was "no apparent disincentive for whole homestay conversions".

"We need to make sure the policy instrument matches the policy objective, so we need to be really clear that this is a revenue-raising measure designed to raise funds from visitors and direct those funds towards first homeowner grants," she said.

While she raised multiple concerns, Ms Glade-Wright ultimately voted for the bill.

"This bill is clearly a bit of a hot mess but … it's a starting point with some of the tweaks by the amendments … and with the review in place, I think that gives an opportunity to work out if the revenue-raising instrument is actually doing what it's hoping to do and to perhaps consider directing funds towards housing supply in the future," she said.

The final vote was six to six, with the president using his casting vote to vote it down, as is convention.

Upon its defeat, Labor shadow treasurer Dean Winter celebrated the "collapse" of Mr Abetz's "confused tourism tax".

"This policy was a complete mess. The government tried to claim the tourism tax wouldn't hurt everyday Tasmanians or local operators, yet the legislation was so confused it left the entire sector baffled.

"When a Treasurer brings a tourism tax bill to Parliament with no economic modelling, no clear operational logic, and no idea how it impacts the broader economy, this is the result."