Short-term letting in strata: NSW rules and by-laws
Note: This article is intended as a general guide only, and should not be taken as legal or professional advice. It’s essential to consult with a qualified professional or seek advice from your managing agent if you have specific questions or concerns about strata living.
This version of the article was updated on .
The one-minute guide
What STRA is: Short-term rental accommodation means renting out a residential lot commercially for periods of less than 3 months. Platforms like Airbnb and Stayz are the most common channels.
Hosted vs non-hosted: Hosted STRA means the owner or permanent resident is present during the stay. Non-hosted means the property is rented out as a whole while the owner is absent. Different rules apply to each.
The key protection: An OC cannot use a by-law to stop an owner from using their lot for STRA if that lot is their principal place of residence. Owner-occupiers are protected.
What the OC can do: An OC can pass a by-law prohibiting non-hosted STRA (investment property Airbnb) by special resolution with a 75% majority. It cannot ban hosted STRA.
Registration: All STRA properties in NSW must be registered on the government STRA Register before being advertised or accepting bookings.
The 180-day cap: In Greater Sydney and certain regional areas, non-hosted STRA is capped at 180 days per year. Stays of 21 or more consecutive days do not count toward this cap.
Short-term letting has become one of the most contested issues in strata living. For owners, it offers a potential income stream from a vacant property or spare room. For committees, it raises questions about security, building wear, noise, and community cohesion. For neighbours, it can mean a rotating cast of strangers in what they expected to be a residential building. NSW law attempts to balance all of these interests through a framework that treats owner-occupiers and investors very differently. Understanding where the lines are drawn is essential for anyone living in, owning, or managing a strata scheme.
What is short-term rental accommodation?
Short-term rental accommodation (STRA) is legally defined under the Fair Trading Act 1987 (NSW) as a commercial arrangement that grants a person the right to occupy residential premises for a period of less than 3 months. This covers the full range of platforms: Airbnb, Stayz, Booking.com, direct bookings, and any other arrangement where money changes hands for a short residential stay.
A non-commercial arrangement, such as a friend or family member staying without payment, is not STRA under this definition and falls outside the regulatory framework entirely.
The two types of STRA
NSW law distinguishes between two types of STRA, and the distinction drives most of what follows in this article.
| Hosted STRA | Non-hosted STRA | |
|---|---|---|
| Definition | The owner or permanent resident is present during the guest's stay (e.g. renting out a spare room while living in the property) | The owner is absent and the entire dwelling is rented to guests (e.g. renting out the whole apartment while away on holiday or as a dedicated investment) |
| Day limits (Greater Sydney and designated areas) | No cap. Hosted STRA can operate 365 days per year. | Capped at 180 days per year. Stays of 21 or more consecutive days are excluded from the count. |
| Day limits (other NSW areas) | No cap. | No cap. Non-hosted STRA can operate 365 days per year in most of regional NSW. |
| Can the OC ban it by by-law? | No. A by-law cannot prevent STRA if the lot is the owner's or occupier's principal place of residence. | Yes. An OC can prohibit non-hosted STRA by special resolution (75% majority) under Section 137A of the SSMA. |
| Registration required? | Yes. Must be registered on the NSW STRA Register before advertising. | Yes. Must be registered on the NSW STRA Register before advertising. |
| Code of Conduct applies? | Yes. Hosts and guests must comply. | Yes. Hosts and guests must comply. |
| Audience | Relevance | Why it matters |
|---|---|---|
| Owner-occupiers | Essential | Your right to use your lot for hosted STRA cannot be restricted by a by-law. Understanding the rules helps you do so compliantly. |
| Investors and landlords | Essential | Non-hosted STRA from your investment property can be banned by OC by-law. Knowing the rules avoids costly compliance failures. |
| Committee members | Critical | You need to understand what the OC can and cannot do before passing or enforcing a STRA by-law. |
| Strata managers | Essential | You advise the committee, draft by-law motions, and manage complaints from the OC and neighbours. |
| Tenants | Important | Tenants may also be able to use their lot for hosted STRA if it is their principal place of residence, unless a valid by-law prevents non-hosted STRA. |
TL;DR: STRA is any commercial short-term letting of under 3 months. NSW treats hosted STRA (owner present) and non-hosted STRA (owner absent) under very different rules. Owner-occupiers have protected rights that by-laws cannot override.
The NSW planning framework for STRA
The planning rules for STRA in NSW came into effect on 1 November 2021 (with Byron Shire following on 31 January 2022). They operate alongside the strata by-law framework and the Code of Conduct. All three apply simultaneously.
Exempt development status
Both hosted and non-hosted STRA are classified as exempt development under NSW planning law, meaning you do not need development consent from your local council to operate STRA, provided you comply with all the applicable requirements. This is an important starting point: STRA is a legitimate residential use of a dwelling, not a tourism or commercial use that requires a separate approval.
However, this exempt development status can be lost if you exceed the day limits, fail to register, or breach the fire safety standards. At that point, the property would be operating as unauthorised development, which can trigger council enforcement action.
The 180-day cap for non-hosted STRA
Non-hosted STRA is capped at 180 days per year in the following areas:
- The Greater Sydney region (Eastern Harbour City, Central River City and Western Parkland City, but not the Central Coast Local Government Area)
- The Ballina area
- The Byron Shire (where a 60-day cap applies to most of the LGA from 23 September 2024, with the exception of two 365-day mapped precincts around Byron Bay Town Centre and Brunswick Heads)
- Parts of the Clarence Valley and Muswellbrook local government areas (as mapped on the NSW Planning Portal)
In all other NSW local government areas, non-hosted STRA can operate 365 days per year without a day limit under the planning framework.
The 21-consecutive-day exemption
Bookings of 21 or more consecutive days to the same person or persons are excluded from the 180-day count. This exemption recognises longer-stay visitors such as academics, business travellers, or people between permanent residences. Provided the stay is less than 3 months, it is still STRA rather than a residential tenancy. This means a property could have two month-long bookings and still have close to 180 days of short-stay bookings available within its annual limit.
TL;DR: STRA is exempt development in NSW, meaning no council approval is needed. Non-hosted STRA is capped at 180 days per year in Greater Sydney and certain regional areas. Stays of 21 or more consecutive days are excluded from the count.
The STRA Register: registration requirements
All STRA properties in NSW must be registered on the NSW Government's STRA Register before the property is advertised or accepts bookings. Registration is mandatory regardless of whether the STRA is hosted or non-hosted, and regardless of which platform is used.
How to register
- Registration is done through the NSW Planning Portal at the STRA home page.
- When registering, the host must confirm that the dwelling meets the STRA fire safety standards.
- The initial registration fee is $65, covering the first 12 months.
- Annual renewal costs $25. Renewal reminders are sent 45, 30, and 7 days before expiry.
- If registration lapses, the listing is blocked for three months before re-registration is permitted.
The STRA Property ID
Upon registration, the host receives a STRA Property ID. This ID must be displayed on every online listing for the property. Major platforms including Airbnb, Stayz, and Booking.com are integrated with the STRA Register, which means booking data is automatically reported and councils can monitor whether properties are exceeding their day limits.
Advertising without registration is prohibited
From 1 November 2021, hosts must not advertise or accept bookings for a STRA property unless both the host and the premises are registered on the STRA Register. Online booking platforms are also prohibited from advertising unregistered properties. Failure to register can result in enforcement action by the local council or NSW Fair Trading.
TL;DR: All STRA properties must be registered on the NSW STRA Register before advertising. The initial fee is $65, with $25 annual renewal. The STRA Property ID must appear on every listing.
Fire safety requirements for STRA
All STRA properties must comply with the NSW STRA Fire Safety Standard. Hosts attest to compliance when registering. The requirements are more stringent than the general residential standard because guests are unfamiliar with the building layout and evacuation routes.
Requirements for all STRA properties
- Smoke alarms in every corridor or hallway associated with a bedroom, and on every other storey not containing bedrooms
- Smoke alarms must comply with Australian Standard AS 3786, be interconnected, and be powered by mains power or a sealed 10-year battery
- Evacuation diagrams displayed at the dwelling entrance and inside each bedroom, mounted at 1200 to 1600mm high, showing exits, fire equipment locations, and the assembly area
Additional requirements for strata apartments (Class 2 buildings)
- A 2.5kg ABE dry powder fire extinguisher in the kitchen, positioned in accordance with AS 2444
- A fire blanket in the kitchen
Who is responsible for fire safety compliance?
The host is responsible for ensuring the STRA property meets the fire safety standard and for attesting compliance at registration. In a strata building, some fire safety measures (such as common area emergency lighting and building-wide systems) are common property and therefore the OC's responsibility. The host's obligations relate to the lot itself: smoke alarms, evacuation diagrams, extinguisher, and fire blanket within their lot. If you are unsure whether a fire safety measure is your responsibility or the OC's, ask your strata manager.
TL;DR: All STRA properties must meet the NSW Fire Safety Standard, including interconnected smoke alarms and evacuation diagrams. Strata apartments must also have a fire extinguisher and fire blanket in the kitchen.
The Code of Conduct
The mandatory Code of Conduct for the Short-term Rental Accommodation Industry applies to all STRA participants: hosts, guests, online booking platforms, and letting agents. It came into effect on 1 November 2021 and is administered by the NSW Commissioner for Fair Trading.
What hosts must do under the Code
- Notify the Owners Corporation that the lot is being used for STRA and provide contact details before the first booking
- Provide guests with a copy of the STRA Code of Conduct and any by-laws applicable to the strata scheme
- Take reasonable steps to ensure guests comply with the Code and the building's by-laws
- Be contactable to manage guests, complaints, and emergencies throughout each stay
- Have third-party public liability insurance covering personal injuries and death
- Ensure guests have emergency contact details for electrical, plumbing, and emergency services
- Advertise the property only once both the host and the premises are registered on the STRA Register
What guests must do under the Code
- Not engage in conduct that contravenes the building's by-laws
- Not cause unreasonable noise or disturbance to other residents
- Not damage common property or permit others to do so
- Comply with the building's rules about parking, bins, and use of common facilities
The strike system and exclusion register
The Commissioner for Fair Trading can investigate complaints about Code breaches and, where a breach is established, take several actions:
- Warning notice: a formal warning recorded against the host or guest.
- Strike: a formal recorded breach. Two strikes within a two-year period results in automatic inclusion on the STRA Exclusion Register.
- Exclusion register listing: a host or guest on the exclusion register is banned from participating in STRA in NSW. Booking platforms are required to prevent excluded persons from making or accepting bookings.
An important nuance for strata schemes: if a complaint relates to a breach of a strata by-law (rather than the Code of Conduct itself), the Commissioner may decline to accept the complaint until NCAT has already made orders for a financial penalty for the by-law breach. This means the OC may need to pursue the matter through NCAT first before the Code's enforcement mechanism becomes available.
TL;DR: The Code of Conduct applies to all STRA participants. Hosts must notify the OC, provide guests with the Code and by-laws, and be contactable. Two strikes in two years results in exclusion from STRA in NSW.
Strata by-laws and Section 137A
The most important provision in strata law for STRA is Section 137A of the Strata Schemes Management Act 2015 (NSW). It defines precisely what an OC can and cannot do when regulating short-term letting in its building.
What the OC can do
An OC can pass a by-law that prohibits a lot from being used for STRA if that lot is not the owner's or occupier's principal place of residence. In plain English: an OC can ban non-hosted investment property Airbnb. To do so:
- A special resolution is required, meaning at least 75% of the votes cast at a general meeting must be in favour.
- The by-law must be properly registered with NSW Land Registry Services to be enforceable.
- The by-law applies to all non-principal-residence lots in the scheme, including those owned by investors who are not present at the meeting.
What the OC cannot do
Section 137A is explicit: a by-law has no force or effect to the extent that it purports to prevent a lot from being used for STRA if the lot is the owner's or occupier's principal place of residence. This means:
- An OC cannot ban owner-occupiers from hosting guests in their own home (such as renting a spare room).
- An OC cannot prevent an owner-occupier from renting out their entire lot while temporarily away, even if this effectively converts to non-hosted STRA for that period.
- If an investor and an owner-occupier are in the same building, a Section 137A by-law can ban the investor's STRA but cannot restrict the owner-occupier's.
What is a 'principal place of residence'?
The Act does not define this term. In practice, it is generally understood as the one place where a person genuinely and habitually resides as their primary home. It is not simply the address on the electoral roll or a driver's licence, though these are relevant indicators. An investor who visits a property occasionally but does not live there as their main home is unlikely to be able to claim it as their principal place of residence. Courts have looked at factors such as where a person sleeps most nights, where their family lives, and where their mail and services are directed. If there is a dispute about whether a lot is a principal place of residence, it may need to be resolved by NCAT.
What happens if the OC has an old blanket ban by-law?
Many older strata schemes passed by-laws that broadly prohibited all short-term letting before Section 137A came into effect in April 2020. Such a by-law remains valid to the extent it prevents non-hosted investment STRA, but it has no force or effect to the extent it purports to prevent an owner-occupier from conducting STRA from their principal place of residence. An old blanket ban does not override the owner-occupier protection in Section 137A.
Planning law and the interaction with Local Environmental Plans
A Section 137A by-law operates within the planning system. Some local councils have provisions in their Local Environmental Plans (LEPs) that state a by-law or rule cannot prohibit or restrict development or use of land that is approved by the planning instrument. Where STRA is permitted as exempt development in a zone, a strata by-law that attempts to prevent it entirely may be ineffective for that reason. This is a complex area and schemes should seek legal advice before relying on an old by-law or passing a new one, particularly if the council's LEP may be relevant.
TL;DR: Under Section 137A, an OC can ban non-hosted STRA by special resolution (75%). It cannot restrict STRA where the lot is the owner's or occupier's principal place of residence. Owner-occupier rights are protected by law.
For committee members: managing STRA in your building
If you want to introduce a STRA by-law
Before putting a motion to a general meeting, committees should consider:
- Is the by-law legally sound? Given the interaction between Section 137A and planning law, it is strongly recommended to have the by-law drafted or reviewed by a strata lawyer before the meeting.
- Do you have the votes? A 75% special resolution is a high threshold. If the scheme has a large proportion of investor-owners, it may be achievable. If most owners are owner-occupiers, it may not pass and may not even be effective if it did.
- Is the by-law needed? If non-hosted STRA is not currently occurring in the building, consider whether proactively passing a by-law creates administrative burden without solving an existing problem.
- Has the by-law been registered? A by-law passed at a meeting has no legal effect until it is registered with NSW Land Registry Services. Your strata manager can arrange this.
If you already have a STRA by-law and want to enforce it
Enforcement follows the standard by-law enforcement pathway:
- Issue a Notice to Comply under Section 146 of the SSMA, requiring the owner to cease the prohibited STRA activity.
- If the breach continues, apply to NCAT for an order and potentially a financial penalty.
- If the NCAT order is made, a further breach can then be the subject of a Code of Conduct complaint to the Commissioner.
If STRA is occurring in your building but there is no by-law
Without a registered Section 137A by-law, the OC has limited power to prevent STRA outright. Its tools are:
- Enforce existing by-laws relating to noise, behaviour, parking, and use of common facilities against guests who breach them.
- Make a complaint to the Commissioner for Fair Trading if the host or a guest has breached the Code of Conduct.
- Report unregistered STRA properties to NSW Fair Trading or the local council.
- Pass a Section 137A by-law at a general meeting if the committee and owners wish to prohibit non-hosted STRA going forward.
Do not attempt to physically prevent STRA without legal authority
An OC cannot physically prevent guests from entering the building, change access codes to exclude them, or take other direct action against STRA guests without a legal basis. Such actions could expose the OC and committee members to liability. Enforcement must proceed through the by-law Notice to Comply process and, if necessary, NCAT.
TL;DR: Committees wanting to ban non-hosted STRA should have a by-law drafted by a strata lawyer, pass it by special resolution, and register it with NSW Land Registry Services. Enforcement is through Section 146 notices and NCAT.
Frequently asked questions
Can our OC ban Airbnb completely?
It depends on what you mean by 'completely.' An OC can pass a by-law under Section 137A that prohibits non-hosted STRA for investment lots. This would effectively ban whole-apartment Airbnb for investor-owners. However, the by-law cannot prevent owner-occupiers from renting out their lot or a room in it while it is their principal place of residence. A complete blanket ban that applied to everyone, including owner-occupiers, would be partially invalid under Section 137A.
I live in my apartment and want to rent it out on Airbnb while I go on holiday. Can the OC stop me?
No, if your apartment is your principal place of residence. Section 137A protects your right to use your own home for STRA. A by-law cannot override this protection. However, you must still register on the STRA Register, comply with fire safety standards, notify the OC, and comply with the Code of Conduct and any relevant day limits in your area.
I own an investment unit and the OC has passed a by-law prohibiting STRA. Can I challenge it?
You can challenge the validity of the by-law at NCAT if you believe it was not properly passed (for example, if the special resolution threshold was not met, or if the by-law was not properly registered). However, if the by-law was validly passed and registered, and your lot is genuinely an investment property rather than your principal place of residence, the OC's power to restrict your non-hosted STRA is well-founded under Section 137A. Legal advice is recommended before challenging a validly passed by-law.
What can we do about a host whose guests are constantly causing problems?
You have several avenues. First, issue a Notice to Comply under Section 146 of the SSMA against the host for any by-law breaches by their guests. Second, the host has an obligation under the Code of Conduct to take reasonable steps to manage their guests' conduct. A complaint to NSW Fair Trading can result in a strike notice and ultimately exclusion from STRA if the pattern continues. Third, if the building does not yet have a Section 137A by-law, this experience may provide the impetus to pass one.
Does STRA affect our strata insurance?
Potentially, yes. Most standard strata building insurance policies cover the building structure and common property as a residential building. If a significant portion of the building is being used commercially for STRA, some insurers may take the view that the risk profile has changed. Hosts should have their own third-party public liability insurance (required under the Code of Conduct) and should also check whether their home and contents insurance remains valid during a STRA period. Committees should disclose material changes in building use to the scheme's insurer if STRA becomes widespread in the building.
Our building's by-law was passed before Section 137A came into effect and bans all short-term letting. Is it still valid?
Partially. The old by-law remains valid to the extent it prohibits non-hosted STRA from investment lots. However, it has no force or effect to the extent it purports to prevent an owner-occupier from using their principal place of residence for STRA. Since Section 137A commenced in April 2020, older blanket bans cannot override the owner-occupier protection. You do not necessarily need to repeal and replace the old by-law, but you should understand that it is subject to this statutory override and cannot be enforced against owner-occupiers.
Is the 180-day cap likely to change?
The NSW Government has been reviewing the STRA framework, and reducing the 180-day cap in Greater Sydney has been discussed as a policy option. Byron Shire has already had its cap reduced to 60 days from 23 September 2024, which demonstrates the direction of travel for areas under housing pressure. At the time of publication, the 180-day cap in Greater Sydney remains in effect. Given that this area is under active policy review, owners and committees who rely on or are affected by the day limit should monitor announcements from NSW Planning and NSW Fair Trading for any changes.
TL;DR: Owner-occupiers cannot be banned from STRA in their principal place of residence. Investment lots can be banned by a validly passed and registered Section 137A by-law. Enforcement follows the Notice to Comply and NCAT pathway.
Important
This article provides a general overview of the NSW STRA framework as at the date of publication. This is a rapidly evolving area of law and policy, and the rules described here may change. The Byron Shire LGA has specific lower day limits and local rules that may differ from the general framework described. Always check the current position with your strata manager, NSW Fair Trading, the NSW Planning Portal, and your local council before operating or regulating STRA in your scheme. Relevant legislation: Strata Schemes Management Act 2015 (NSW), Section 137A (STRA by-laws); Fair Trading Act 1987 (NSW), Sections 54A to 54E (Code of Conduct); Environmental Planning and Assessment (Short-term Rental Accommodation) Regulation 2021 (NSW).
Related reading
- By-laws in strata schemes: rules, creation and enforcement — learning.netstrata.com.au
- Disputes and resolution: conflict resolution processes — learning.netstrata.com.au
- Insurance in strata schemes: coverage requirements and claims — learning.netstrata.com.au
- Property management: maintenance and repairs — learning.netstrata.com.au
- What the latest strata law changes mean for owners in 2025 and 2026 — learning.netstrata.com.au
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