A large flow of tourists has a positive impact on the economy of the country, but does not always benefit it. The mass influx of foreigners brings more harm than good to world capitals, so new restrictions are introduced at the level of individual settlements and countries regarding short-term rentals. After all, the hometown should be a home, not a constant attraction for strangers.
France is tightening conditions
Every guest of the French capital dreams of seeing Paris and not dying, so there are plenty of people willing to rent short-term accommodation there. Considering the sky-high prices for hotel rooms near the Eiffel Tower, an apartment for a few dozen euros on Airbnb seems like a salvation for foreigners with a travel bag on their shoulders. The increased demand attracts no less attention from parliamentarians. Not long ago, they adopted new law, regulating the rules of short-term rentals. The following amendments will come into effect as early as autumn 2024:
- All objects of furnished tourist accommodation, which are rented out for short-term stays, will be assigned a unique registration number.
- Tax benefits provided to owners of short-term rental properties will be reduced from 71% to 30%.
- Local authorities will be granted the right to restrict the construction of housing for tourists, giving preference to residential real estate intended for permanent residence.
New conditions, especially those related to benefits, put obstacles in the way of homeowners, so it is expected that the number of listings on Airbnb and its analogues will decrease in the near future.
Spain is returning to hotels
Barcelona has decided to act more radically. The abundance of tourists has greatly annoyed the authorities, so they wanted to sharply and categorically close the entrance to rented apartments for them. Thus, by November 2028, a complete ban on short-term rentals will be announced, and 10,101 licenses for tourist apartments will be annulled. The Mayor of Catalonia, Jaume Collboni, explains such harsh measures by the fact that due to the popularization of short-term rentals, real estate prices have significantly increased overall. In just the last 10 years, prices have changed beyond recognition.
- The cost per square meter has increased by 38%;
- Mortgage rates have jumped by 68%
Despite all the restrictions, the tourism industry will continue to develop, just in a different direction. For example, the ban on hotel construction, in effect from 2015 to 2023, may be slightly relaxed, so that owners of hotels will thrive. Due to the lack of alternatives, tourists will have to accept their services, no matter the cost. The association of tourist apartments has reacted negatively to the changes in legislation because they increase the risk of illegal rentals. Illegal rentals were already common (a ban on the illegal rental of 9,700 apartments was imposed in 2016), and now, without proper control, it may become even more commonplace. The government promises to closely monitor homeowners and regulate short-term rentals, but only time will tell if they will succeed.
What is happening in other countries of Europe
- 🇮🇹 Italy: a national short-term rental database is being introduced to monitor tenants and their properties. The tax on rental income will also be increased. Previously at 21%, it has now been raised to 26%.
- 🇨🇾 Cyprus: Some homeowners have discovered a cunning scheme - to qualify for the reduced VAT rate of 5%, they registered their property as their primary residence while unlawfully renting it out to tourists on a short-term basis. Tax raids will quickly expose anyone attempting to hide their activities. All violators face a fine if they do not voluntarily pay the 14% VAT.
- 🇨🇭 Switzerland (Zurich): The new restrictions will mainly affect Airbnb, as this service is most commonly used by tourists to find accommodation. According to the new rules, only 10% of all listings will be available for short-term rental.
- 🇵🇹 Portugal (Lisbon): innovations also affect Airbnb. Thus, tourist taxes are introduced and it is mandatory to sign a contract for the shared use of housing.
- 🇮🇪 Ireland (Dublin): one of the oldest and most beautiful districts of Dublin, Temple Bar, literally overrun by tourists, so now a special permit is required to provide accommodation for short-term rent. Authorities hope that in this way, local residents will be able to rest a little from foreigners on their native streets.
- 🇳🇱 Netherlands (Amsterdam): Property owners will not be able to avoid the tourist tax, as 1 million euros have been allocated for monitoring violations. Another new measure in the short-term rental sector in Amsterdam is that properties can be rented out for a maximum of 60 days per year.
This is just a basic list of countries where new rules for short-term rentals are emerging. If you are planning to invest in real estate to rent it out in this way, be sure to familiarize yourself with the current rules in the specific location so that your business does not inadvertently turn into a problem.