Guidance for applying the Victorian Government’s 7.5% Short Stay Levy on reservations of 27 nights or less, including setup and reporting steps.

Overview

This guide will assist you with the best practices to implement the new Short Stay Levy.

The existing Rate(s) you currently sell through your Online Travel Agents (OTA) via the RMS Channel Manager will not change, and no additional channel mapping is required.

Two new Rate Types (Derived Rates) will need to be created for reservations sold Directly In-House or via the RMS Booking Engine (IBE):

• One Rate Type for reservations staying 27 nights or less, with the Levy added.
• One Rate Type for reservations staying 28 nights or more, without the Levy. 

You may need to repeat these steps if you have multiple Rates that you sell In-House/Direct or via the RMS Booking Engine (IBE).

At-a-glance steps:

1. Create a GL Account Code for the levy. (Optional) 
2. Create a Sundry Charge for the levy (GST Free). 
3. Create Derived Rates:
   • Rate A: ≤27 nights (with levy).
   • Rate B: ≥28 nights (without levy). 
4. Add the levy Package to Rate A. 
5. Add rates to the RMS Booking Engine (IBE). (Optional) 
6. Adjust Security Profiles to restrict OTA rates. (Optional) 
7. Review Examples for rate adjustments and Vrbo/Stayz commission. 
8. Use Reports to reconcile levy charges.

Guide

Before starting the steps, please note:

• This guide is for Direct Reservations and Reservations made via the RMS Booking Engine (IBE) only.
• Examples may differ from your setup and configuration.
• Steps are not required for reservations made via an Online Travel Agent (OTA) (e.g., Airbnb, Booking.com), as OTAs manage levies for you.
• VRBO/Stayz is working on implementing the levy and will invoice properties for Levies and Commissions

Setup and Configuration

This section outlines the steps for configuring the Short Stay Levy and creating the Derived Rates.

Step A: Create GL Account Code (Optional)

If you already have a General Ledger (GL) Account Code for the Short Stay Levy, skip this step.

To create a new GL Account Code:

1. Navigate to Accounting > GL Acc Code 
2. Select Add.
3. Add a GL Acc Code and Description.
4. Click Save & Exit.
   (All other fields are optional.)

Further information: How to create a General Ledger Account Code

Step B: Create Sundry Charge

A Sundry Charge is required to apply and report on the levy.

To add this:

1. Navigate to Accounting > Sundry
2. Select Add.
3. Enter a Description.
4. Select GL Acc Code.
5. Set GST Type = GST Free.
6. Click Save & Exit.

Further information: How to create Sundry Charges

Step C: Configure Derived Rates

The next configuration depends on whether your Online Travel Agent (OTA) rates have a Minimum/Maximum Length of Stay (MLOS).

For Online Travel Agent (OTA) Rates Without MLOS

For Online Travel Agent (OTA) Rates With MLOS

Steps to Create Derived Rates (For Rates Without MLOS)

Create two new rate types:

• One for reservations 27 nights or less (with levy).
• One for reservations of 28 nights or more (without levy).

These rates can be derived from your existing Online Travel Agent (OTA) rates without affecting channel mappings.

1. Access Rate Manager:
   1. Navigate to Chart > Rate Manager
   2. Navigate to Select Rate > Rate Types
   3. Select Derived Rate.
   4. Select Add.

2. Derived Rate Setup:
   1. Select the Derived From Rate (your Online Travel Agent (OTA) rate).
      This would be the rate you currently sell via an Online Travel Agent (OTA) and will add the Levy for Direct and RMS Booking Engine (IBE) Bookings.
   2. Add Type Description.
      This is the New Rate/Tariff Type Description that the guest will see online.
   3. Add Charge Description.
      This is the New Rate/Tariff Charge Description that the guest will see on their Account, which could be different from the Rate/Tariff Type Description.
   4. Select Set New Min/Max Nights.

3. Adjustment Amount:
   1. Select Adjustment Amount.
   2. Select one or more Properties if required.
   3. Select '+Amount' under Adjustment 1
      (No adjustment amounts needed).
   4. Click Apply to All.
   5. Select Save (do not exit).

4. Set Access Settings:
   1. Select what this Rate Type will be Accessible to.
      (If unsure, please see Access Settings article).
   2. Select Apply.

5. Set Min/Max Nights:
   1. Select Min/Max Nights.
   2. Add a Maximum of 27 nights for every day of the week.
      Doing this will ensure that when a reservation is made for 28 nights or longer, this rate will not show as an Option.
   3. Select Save (do not exit).

6. Add Package for Levy:
   1. Select Packages.
   2. Select Add.

3. Select the Sundry Charge created earlier.
4. Select Show on Account (Optional)
   This will display this as a separate charge on the Reservation Account and will be visible to the guest. If not selected, the charge will be rolled into the accommodation charge, but will still report revenue separately.
5. Select Fee Structure = Percentage of Rate.
6. Add % of Rate. (e.g. 7.5%)
7. Set Apply Charge - On the Period = Every > Blank > (Period)
8. Select Starting Period Include
9. Select Ending Period Exclude
10. Select Save/Exit.

7. Create the Second Derived Rate: 

   1. Repeat Steps 1 to 5 from Create Derived Rates (For Rates Without MLOS), but with one key change:

      In Step 5 (Min/Max Nights), set Minimum Nights to 28 instead of setting a Maximum.
      This ensures the second rate only applies to stays of 28 nights or more (which are exempt from the levy).

Steps to Create Derived Rates (For Rates With MLOS)

If your existing rates have a Minimum/Maximum Length of Stay (MLOS), you will need to create a Derived Rate for each rate type.

The steps are the same as those outlined in Create Derived Rates (For Rates Without MLOS), with one key difference:

• Repeat these steps for every rate variation that has a maximum of 27 nights.

Optional Settings 

Use these settings to customise your system and improve how it works for your property.

Add Rates to the RMS Booking Engine (IBE) 

If you want to make these rates available online, follow the steps in How to Add Rates Types to the RMS Booking Engine.

Security Profiles

You may restrict Online Travel Agents (OTA) Rates in Security Profiles to prevent incorrect bookings. See the Security Profile access to Rate Type article.
 

Manual Adjustments to Package

If you need to manually override the Reservation Package or adjust the levy on a reservation. See the Reservation Package Override article.

Examples

This section provides practical examples to help you apply the Short Stay Levy correctly, including rate adjustments and commission changes.

Passing the levy on to guests

To pass on the full 7.5% levy to guests, increase rates by 8.11% because the levy is calculated on the total amount, including the levy itself.

Why 8.11%?

The levy is calculated on the total, including the levy. 

Formula: increase% = levy / (1 − levy) = 0.075 / 0.925 = 0.08108 → 8.11%

Adjusting VRBO/Stayz commission

Increase your VRBO/Stayz commission by 8.11% so the Short Stay Levy funds are allocated to the commission account for when VRBO/Stayz invoices for this.

Example: If your VRBO/Stayz commission is 12%, add 8.11% to increase it to 20.11% (12 + 8.11 = 20.11).

Reporting

There are several reports and utilities you can use to view the levy charges:

• General Transfers (Trust Accounting)
  For Trust Accounting properties, the Short Stay Levy will appear on the General Transfers utility for processing.
• Cash/Charge Report
   If the Short Stay Levy is assigned to a dedicated GL Account Code, you can use the Management Cash/Charge Report to view total charges and review itemised transactions for detailed reporting.
• Sundry Usage Report
  Itemises individual transactions for the Sundry Charge used for the Short Stay Levy.

Further Information

This section provides links to official resources for more details about the Short Stay Levy and its requirements:

• Understanding the short stay levy | State Revenue Office
• Short stay levy | State Revenue Office
• Short stay levy – frequently asked questions | State Revenue Office