Most common vacation rental laws that could affect you tomorrow

Guests in their pyjamas being evicted of their short-lets in Amsterdam… Property owners fined €30K in Barcelona… Tax inspectors following travellers in the street of Paris, trying to find out to what apartment rental they go to… Horror stories you think? No, local laws cracking down on illegal vacation rentals is a reality.


The reasons are manifold: hotels lobbying (after all Budget hotels are predicted to loose 10% of income to Airbnb by 2016), shortage of long-term apartment rentals in big cities, avoidance of tax, and the genuine need for setting standards especially in terms of safety and quality. Vacation rental laws and regulations may not have reached your region yet but, take it from us, it’s worth getting ready for the eventuality.

TIME REGULATIONS

Some governments have now applied a regulation to limit the amount of time you can rent out your primary residence. While this doesn’t concern most readers of this blog who are professional industry players, it is worth understanding how laws evolve around the sharing apartment industry… after all it’s the likes of AirBnB that have brought our industry under the close scrutiny of governments in recent years.

When last year we saw the ban of sub-letting your rooms in Barcelona, and many owners / agents getting €30K fines, everyone started panicking. It was a blow for AirBnB and all those who made ends meet renting out their spare room. But then this year things are looking up again, with London homeowners being granted the right to rent out their houses, apartments or rooms for up to 3 months a year. In Amsterdam that is also true, but just for a shorter time of two months per year and a max of four guests at the time. As for New York vacation rental laws it’s quite simple: you can’t rent your flat out for less than 30 days unless you are also living in the property.

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REGISTRATION NUMBER

If your country doesn’t regulate the holiday accommodation industry yet be sure it will come soon. The idea is that you will need to register your property as a commercial one with your town hall and to pay the relevant taxes. However, some cities don’t just leave it at that.

In Barcelona you can’t actually get a registration number for the next 2 years. Nor can it be passed on if you buy a property. Then again, laws have been changing every 2 months so chances are…

Paris is another extreme case: if you want to register an apartment as commercial one then you have to also acquire a commercial property and turn it into a residential one; i.e. can’t buy just one, have to buy two. Not only that but the second property has to be in the same quarter to avoid you buying a real cheap property in a less-thought-after arrondissement. Sounds complex? Yep that’s why very few have been following the rule. But officials hope that the new €10K fines will change that…

TOURIST TAX

Whether you rent out your couch or a building, if you ask a tourist payment for a bed you must pay the tourist tax. This is true for hotels so it’s true for vacation rental owners too. It can be an administrative nightmare as your often have to add VAT on top of the rate and invoice separately…. In Barcelona it’s not required for under 17 years old but you need passport copy to prove… On the bright side, this tax is meant to cover for clean streets and the extra rubbish tourist leave. So, well worth it.

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FURTHER REGULATION PREDICTIONS

As the vacation home rental industry matures we predict that it will be regulated much more like hotels i.e.

– Safety equipment like fire extinguisher, smoke alarms, will be required
– If you own a building you’ll have to have disabled access
– You’ll need to allow for regular inspections
– For quality standards a hotel classification framework may be put in place (Dubai already does this “Luxurious (Deluxe) and Touristic (Standard).”)
….

And what vacation rental laws do you predict for your region? Let us know in the comments below.

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  • JohnH

    Where did you read that “Property owners fined €30K in Barcelona” ? Source please.

  • hi John, thanks for participating in the discussion. I personally know someone but for obvious reasons won’t mention his name. Here is another source: “Some 33 apartment owners had, however, been hit with fines of up to €30,000 ($40,000), while a further 113 cases were still open.” that’s from http://www.thelocal.es/20140827/barcelona-cracks-down-on-illegal-tourist-apartments-barceloneta-airbnb

  • JohnH

    Thank you for the source. “Up to” is meaningless. I’m not sure how trustworthy your source is considering they call Airbnb “Airb”. Private property owners in Barcelona have been hit with €9,000 fines. Fines can go up to €30,000 EUR, but only Airbnb has been fined such a high amount in Barcelona. Are you saying you personally know of a person in Barcelona who has been hit with a €30,000 EUR for renting out their apartment?

  • Hi John, yes I guess it doesn’t matter how much you’re fined but that you’re fined. It signals that the market has changed, that it is now much more regulated and it is important for us to stay informed. I hope you agree that this article goes someway in shedding light on the subject!