Can I Use My Residential Property for Short-Term Rental Accommodation (Airbnb) in NSW?

Short-Term Rental Accommodation in NSW: What the Rules Say

Short-term rental accommodation (STRA) through platforms such as Airbnb and Stayz has become increasingly common across NSW. The regulatory framework governing STRA was significantly reformed in 2021 and property owners need to understand the current rules before listing their property.

In short: Short-term rental accommodation is regulated in NSW through a combination of planning controls, a mandatory Code of Conduct and a registration scheme. The rules differ depending on whether you are renting out your principal place of residence or an investment property.

The NSW STRA Framework

The current framework has three main components:

1. Planning controls under the Housing SEPP The State Environmental Planning Policy (Housing) 2021 defines STRA and establishes the planning framework. Key distinctions:

• Hosted STRA: The host lives on the property while it is being let. This is permissible in all residential zones without development consent.

• Non-hosted STRA: The host does not live on the property during the letting period. This requires development consent in most residential zones (though exempt development provisions apply in some locations) and is subject to annual night caps.

2. Night cap limits For non-hosted STRA, properties in Greater Sydney (and some regional areas) are subject to a maximum of 180 nights per year. Properties outside these areas may have different or no night cap limits. Some councils have applied to impose lower limits in their areas.

3. Registration and Code of Conduct All STRA properties must be registered on the NSW STRA Register. Hosts, guests and letting platforms are subject to the NSW Short-Term Rental Accommodation Code of Conduct. Properties (and hosts) can be removed from the register for serious or repeated Code of Conduct breaches.

Step-by-Step: Setting Up a STRA Property in NSW

1. Confirm whether the property is in a location with specific STRA planning controls (check the applicable LEP and the Housing SEPP).

2. Determine whether your property will be hosted or non-hosted.

3. If non-hosted, confirm the applicable night cap limit for your area.

4. Confirm whether development consent is required (most non-hosted STRA requires consent unless it meets the exempt development criteria).

5. Register the property on the NSW STRA Register before listing.

6. Ensure the property meets the safety requirements set out in the Code of Conduct (smoke alarms, fire extinguishers, emergency information).

7. List the property on your chosen platform, ensuring the platform is also registered under the scheme.

Real-World Examples

Example 1: Owner renting out a spare room 

A homeowner in Sydney rents out a spare bedroom through Airbnb while living in the home. This is hosted STRA. It is permissible without development consent in residential zones. The host registers the property on the NSW STRA Register.

Example 2: Investment apartment listed full-time 

An investor owns an apartment in inner Sydney and lists it on Airbnb year-round without living there. This is non-hosted STRA. The 180-night cap applies. Development consent may be required. The investor registers the property and ensures the listing does not exceed 180 nights per year.

Common Misconceptions

"Listing on Airbnb is always legal in NSW." 

Not always. Non-hosted STRA requires development consent in most zones and is subject to night cap limits. Listing without the correct approvals is unlawful.

"The body corporate can't stop me from listing on Airbnb." 

Strata by-laws can restrict or prohibit STRA within a strata scheme. The Strata Schemes Management Act allows strata schemes to pass by-laws limiting STRA.

"I only need to register if I rent for more than a certain number of nights." 

All STRA properties, regardless of the number of nights let, must be registered on the NSW STRA Register.

Frequently Asked Questions

What is the NSW STRA Register? 

An online register maintained by NSW Fair Trading where all STRA properties and hosts must register before listing.

Can a strata scheme ban STRA? 

Yes. A strata scheme can pass a by-law prohibiting non-hosted STRA. A by-law cannot prohibit hosted STRA.

What happens if I exceed the night cap? 

Exceeding the night cap is a breach of the development consent conditions. Council can take enforcement action.

Do I need development consent for hosted STRA? 

No. Hosted STRA is permissible without development consent in residential zones under the Housing SEPP.

What safety measures does my STRA property need? 

The Code of Conduct requires working smoke alarms, a fire extinguisher, a fire blanket, and displayed emergency contact information and evacuation procedures.

Can councils impose stricter STRA rules? 

Yes. Councils can apply to reduce the night cap limit below 180 nights per year in their area. Some councils have done so for specific localities.