EU rules on short-term rental properties change

Aspasia Athinaiou
January 12, 2024

Table of Contents

The European Parliament has called for changes to the regulatory framework for short-term property rentals to improve transparency

You don’t need us to explain to you what the increase in the number of properties available for short term rentals has caused in urban centres

Neighborhoods have changed dramatically as private properties now rented out as accommodation have grown and become more numerous.

Something that, at first glance, has a positive effect on tourism.

On a second view, it is causing a problem with the availability of housing to citizens and the skyrocketing of prices in those apartments that are still available as residences.

In addition, the lack of appropriate rules has been shown to contribute to problems such as nuisance to residents, unfair competition and, ultimately, an overall impact on the viability of certain areas.

According to Eurostat data, in 2022, more than 547 million overnight visitor bookings were made within the European Union through one of the four major platforms.

  • On average each day there were 1.5 million visitors.
  • Every minute about 90 stays were booked.
  • Every day there were almost 130,000.
  • Six out of 10 overnight stays (60.5%) were tourists from another country. There was a drop in share, compared to what was the case before the pandemic (67% in 2019).
  • Almost a quarter of total overnight stays were in France (131 million).
  • Spain (106 million), Italy (77 million), Germany (39 million) and Portugal (31 million) complete the top five.
  • Countries with more than 10 million visitor nights recorded in 2022 included Greece (29 million), Croatia (28 million), Poland (22 million) and Austria (15 million).

According to the official briefing of the European Parliament, “the short-term rental market has expanded rapidly in recent years. Although the variety of accommodation solutions, such as private properties rented out as accommodation, can have a positive effect on tourism, its exponential growth has caused problems.

Challenges related to short-term leases

The increase in short-term accommodation rentals has created a number of challenges:
Characteristically, a need has arisen for:

  1. more transparency (the lack of transparency in short-term rental operations makes it difficult for authorities to monitor and regulate these services effectively),
  2. for regulation (public authorities face challenges in ensuring that short-term rentals comply with local regulations, taxation and safety standards due to insufficient information),
  3. for urban development (some local authorities are finding it difficult to cope with the rapid growth of short-term lettings which can transform residential areas and place an additional burden on public services such as waste collection).

In response to the growing number of short-term rentals, several cities and regions have adopted rules to restrict access to short-term rental services.

The EU response to the increase in short-term rentals

In November 2022, the European Commission presented a proposal to provide more transparency in the short-term rental sector and support public authorities in promoting sustainable tourism.

The Parliament and the Council reached an agreement on the proposal in November 2023.

Simpler online registration

The agreed text creates a free (or at a proportional cost) online registration procedure for short-term rental properties in those EU countries that require it. Once the process is completed, hosts will receive a registration number that will allow them to rent out their property. The competent authorities will know the identity of the host and will be able to verify their information.

Safer rental services

Online platforms should ensure that the host registration number allows users to identify the property in the listing and that the information provided is reliable and complete.
Platforms should make “reasonable efforts” to conduct random checks on this information. Competent authorities can suspend registration numbers, require platforms to remove illegal listings or sanction non-compliant platforms or hosts.

Data transmission

Member States will create a single digital entry point for receiving data from platforms on host activity (e.g. specific address, corresponding registration number, URL of the registration) on a monthly basis.

A less burdensome scheme has been created for micro and small platforms with an average of 4,250 registrations or less.
This data will be used to gather statistics and will allow public authorities to better assess the situation on the ground and improve tourism services in their area.

The MEP responsible for managing the legislative dossier in the Parliament, Kim van Spardak (Greens/EFA, Netherlands) said that “previously, rental platforms did not share data, making it difficult to enforce city rules. This new law changes that, giving cities more control.”

Before the new agreement can enter into force, the interim agreement must be approved by the European Council and Parliament.

EU countries will then have 24 months to implement it.

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