Big change for Victorian hosts who list with booking,com (BDC) as of December 1. After an 11 month delay with the implementation of this Victorian Government tax from December 1 BDC will start invoicing hosts for this tax as a separate invoice to the current invoice for their 13.2% commission. While the nominal rate of this tax is 7.5%, because it is a tax on a tax the effective rate is 8.11%. Airbnb and VRBO (Stayz) have been automatically adding the levy to host uploaded tariffs since January 1 this year, so there is no impact on hosts profit when the platform pays the levy (other than reduced overall bookings due to the 8% price hike). However BDC is not making the automatic price action and it is up to the host to initiate pricing action. So unless you take action between now and December 1, this change is going take a massive 8% reduction off the bottom line of every BDC booking.
The easiest and quickest way to fix this is to add a 8.11% Government Tax to your profile under the “VAT/tax/charges” area. The host cannot edit this screen directly or by messaging you have to phone BDC and request the change which will be effective immediately.
An example of the calculation is
Price before Victorian Short Stay Levy $100
Plus Tax uplift of 8.11% = $8.11
Invoice to guest $108.11
Less Victorian Short Stay Levy @ 7.5% of total Invoice value = $8.108
Net Value value to host after tax = $100
We will not see how this works in action until after the first booking after December 1. I assume the tax uplift will apply to price per guest but I am waiting to see how it will work with cleaning fee. Already you have to add 13.2% to the cleaning fee to allow for the BDC commission to be deducted if the 8.11% tax uplift is not applied to the cleaning fee then you will need to increase the amount to 20.82%.
Of course an alternative approach instead to asking BDC to add the 8.11% government tax is to just make all tariffs on BDC 20.82% higher than your direct price. However that does not show the ridiculously high amount the Victorian Government is ripping off your guests.
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