ACT Landlord Compliance in 2026: What the Short-Term Rental Levy and Insulation Mandate Mean for Investors

Two new regulatory requirements have landed on ACT landlords in the past twelve months, and investors who have not yet reviewed their compliance position need to do so now. The 5% short-term rental levy has been in effect since 1 July 2025. The mandatory ceiling insulation upgrade has a hard compliance deadline of 30 November 2026 for existing leases.

Neither requirement is administratively light, and the penalties for non-compliance are not trivial. Here is what each one requires and what it means for your investment strategy.

The ACT Short-Term Rental Accommodation Levy

What It Is

The Short-Term Rental Accommodation Levy Act 2025 introduced a 5% statutory levy on all short-term rental bookings in the ACT where the stay is less than 28 continuous days in duration. The levy commenced on 1 July 2025.

This applies to any property rented through booking platforms (Airbnb, Stayz, Booking.com, and any equivalent service), as well as direct bookings managed outside platforms where the host is operating commercially as an unhosted short-term rental.

What the Levy Is Calculated On

The 5% applies to the total gross booking amount paid by the guest. This is intentionally broad:

• The nightly accommodation rate
• Cleaning fees
• Pet fees
• The platform's booking fee (as charged to the guest)

If a guest books three nights on Airbnb for $300 per night, pays a $100 cleaning fee, and the platform charges a $60 booking fee, the total gross booking amount is $760. The levy is $38.

The levy is designed to appear at checkout as an additional cost to the guest, which means the investor's nominal income does not change — but the gross cost of the stay to the guest increases by 5%. Over time, this reduces the competitive attractiveness of ACT short-term rentals relative to interstate markets where no equivalent levy applies, suppressing demand and occupancy rates.

Who Has to Register and Remit

Booking platforms: Platforms operating in the ACT market are required to register with the ACT Revenue Office, collect the levy automatically from guests at checkout, and remit it quarterly. Airbnb and Stayz are expected to comply; smaller platforms should be assumed non-compliant until confirmed otherwise.

Investors running direct bookings: If you accept short-term bookings outside of a registered platform — directly through a website, via social media, or through word of mouth — you are personally responsible for registering with the ACT Revenue Office and remitting the 5% levy yourself. This requires registration, quarterly lodgement of returns, and payment by the due dates.

Hosted stays: If you live on the property simultaneously while a guest is staying — a genuine shared-home arrangement where you sleep in your own bedroom while the guest occupies a separate room or space — you are fully exempt from the levy. The exemption applies strictly to genuine co-occupancy situations. If you vacate the property for the duration of each stay, you are not hosted.

Strategic Implications for Investors

The levy adds roughly 5% to the cost of every short-term booking for guests. The practical effect on occupancy varies by market segment, but evidence from comparable levies in other jurisdictions suggests a 3% to 8% reduction in booking demand over time as price-sensitive travellers shift to cheaper alternatives.

For investors who adopted short-term rental strategies specifically to circumvent the ACT's rent increase caps and no-cause eviction bans, the levy narrows the financial advantage. Combined with the additional operational complexity of short-term management (higher cleaning costs, more frequent turnover, higher platform fees), the net yield difference between well-managed short-term and long-term rentals in Canberra has compressed significantly.

Many investors who were running unhosted Airbnb properties in Canberra are now re-evaluating the strategy and returning to long-term tenancies. The 5% levy itself is not necessarily a deal-breaker for high-demand inner-city properties near the Convention Centre or the ANU, where short-term occupancy rates and nightly rates remain strong. But for secondary locations — outer suburbs, standard residential streets without proximity to tourism or conference demand — the case for short-term rental over long-term tenancy has become difficult to sustain.

The Mandatory Ceiling Insulation Standard

What the Mandate Requires

The ACT Government has introduced minimum ceiling insulation standards for rental properties. Any rental property with no ceiling insulation, or with existing insulation rated below R2, must be upgraded to a minimum thermal performance rating of R5.

This is not a recommendation. It is a legal compliance requirement, and it applies on a mandatory timeline.

The Compliance Deadlines

Existing leases: If your property is already under a long-term lease as of the relevant commencement date, the compliance deadline is 30 November 2026. You have until that date to complete the installation and documentation.

New leases: Any property entering into a new lease agreement triggers a 9-month compliance window from the start of that tenancy. If you sign a new lease in March 2026, you must be compliant by December 2026.

Properties that already have R2 or better ceiling insulation are compliant and do not require upgrades. Properties with no insulation at all — common in homes built before the 1970s — require a full R5 installation.

Cost and Scope

The cost of installing R5 ceiling insulation in a standard Canberra dwelling varies based on:

• Current insulation status (none versus degraded existing versus partial coverage)
• Accessibility of the ceiling cavity
• Property size and ceiling configuration

For a standard three to four bedroom house with accessible roof space, expect installation costs in the range of $1,200 to $2,500. Properties with difficult access (low-pitch roofs, limited manhole access, multiple internal ceiling levels) may run higher.

For investors purchasing older established homes — particularly in suburbs developed in the 1960s and 1970s where the Mr Fluffy buyback era homes were concentrated — ceiling condition should be on the pre-purchase inspection checklist. If the property has no insulation, the compliance cost is a near-certain immediate capital expenditure. If it has old, degraded rockwool or fibreglass batts at R1.5 or below, an upgrade to R5 will still be required.

Interaction with Asbestos

For properties built before 1985, any ceiling inspection or installation work requires an asbestos pre-inspection before anyone enters the ceiling space. In older ACT homes, ceiling cavity materials may include asbestos cement sheeting as the eaves lining or roofing, and disturbance without prior assessment creates both safety and legal risk. A licensed asbestos inspector can assess the ceiling space before the insulation contractor is engaged, and the cost is modest — typically $400 to $800.

This sequence matters: asbestos inspection first, insulation installation second, compliance documentation third.

Documentation Requirements

Compliance with the insulation mandate requires maintaining records of the installation — specifically, the R-value of the installed material, the installation date, and the contractor's details. Your property manager should hold a copy of the compliance documentation in the property file, and it should be available for review on request by Access Canberra (the ACT Government's regulatory body for rental standards).

Failure to meet the insulation mandate by the relevant deadline is a breach of rental property standards and can result in infringement notices and financial penalties. More practically, it gives a tenant grounds to raise a formal compliance complaint, which can escalate to ACAT and result in orders requiring immediate rectification.

Prioritising Your Compliance Workload

If you have multiple ACT investment properties, work through them systematically before the deadlines arrive:

1. Short-term rental levy: Confirm your Airbnb listing is through a registered platform handling levy collection automatically. If you have direct booking channels, register with the ACT Revenue Office or shut them down.

2. Insulation audit: For each long-term rental property, confirm current ceiling insulation status. If it is below R2 or absent, engage a licensed installer to schedule the upgrade before November 2026. Do not leave this until October — Canberra's insulation installer capacity will be under pressure as the deadline approaches.

3. Asbestos check for older properties: If properties were built before 1985 and have not previously had a ceiling space assessment, commission one before any insulation work is scheduled.

Staying ahead of ACT regulatory changes is an ongoing requirement for property investors in the territory. The Australian Capital Territory Investment Property Guide includes a 2026 landlord compliance checklist covering the STRA levy, insulation mandate, rent increase procedures, and notice-to-vacate requirements under the Residential Tenancies Act 1997.

See more Australian Capital Territory guides →