'Problems from the word go': Short-stay accommodation local law revoked

But it comes with a warning the city council could now not manage issues that arise with holiday homes such as noise and parking complaints.

Complaints instead will referred to police and other government bodies.

The short-stay local law was introduced by the city council in February 2023 and by December 2023 there weere 139 holiday homes registered, bringing $55,600 into the city's coffers.

But when the state government last year announced it was bringing in a 7.5 per cent levy that would apply to holiday accommodation across all Victoria it made Warrnambool's local law redundant.

Cr Max Taylor said the council's "law had its problems right from the word go".

"Our council was hesitant in putting this law through but it's a good finish now that the state government has introduced the law right throughout Victoria," he said.

Chief executive officer Andrew Mason said it had been a "fairly lengthy process" to revoke the short-stay accommodation local law which was done in response to the new levy which would be introduced in January 2025.

"We as a council could no longer have a levy that was in conflict with theirs," he said.

Cr Debbie Arnott said when the council first moved the local law, the intent was to provide regulation in an industry that actually had none.

She said the new levy was expected to raise $70 million for the government.

"The revenue is intended to be transferred to Homes Victoria to be invested in social and affordable housing options - a very worthy cause," she said.

"I would hope we would see 25 per cent of those funds indeed in regional areas of Victoria."

Cr Arnott said it was difficult now for the council to manage issues associated with short-stay accommodation, such as noise and parking, which would now be referred to the Vic Police and other government bodies.

Cr Richard Ziegeler said it was going to take the council a bit of effort and "some difficulty" to administer its local law in the first place.

"But the state government basically came to the party and instituted their own law which makes ours a little bit redundant," he said.

"Initially we were trying to bring the short-stay accommodation into some sort of regulated space which didn't exist beforehand."

Cr Vicki Jellie said municipalities had wanted a consistent regulation across the state.

"My only hope is that we get some of that funding that they're promising. I'd really like to see where that goes," she said.

"I hope they're accountable for doing that."

Mayor Ben Blain said only 25 per cent of the revenue collected from the new levy would be returned to the regions.

"With over 50 per cent of Airbnbs being in the regions, we'd like to see that money reinvested back into the regions," Cr Blain said.

"Especially when you start comparing how we deliver our services compared to metros."

Cr Blain said it was something Warrnambool council would be pushing at the Municipal Association of Victoria conference later in the month.