A new legislative context for short-term rental in Europe – Twissen Season Report Spring 2017

Sharing economy development in the hospitality industry has risen several issues, particularly about the legality of the shortterm rentals. Even if there isn’t a shared regulation at a European level, it seems that, if compared to the past years, Governments and short-term rental companies are resolving their divergences.

As we reported in the Twissen Season Report Summer 2016, last year Homeaway and Airbnb, the most popular short-term rental companies, had to face Spanish regulations, particularly in the city of Barcelona, which had fined both of them. On the other hand, recently, the city of Madrid started the drawing up of an agreement with Airbnb, which could be signed within the beginning of 2018, in order to regulate this kind of rental, making it legal. Among the measures, it is expected a tax which is going to finance public services and a rule on limited number of days of rental.

In Italy, the Government approved the so-called “Airbnb tax”. The rule actually includes the application of a 21% flatrate income tax which short-term rental companies, both online and offline, must pay to the Government.

At a continental level, the European Commission recently published the summary of the targeted consultation which included the accommodation services providers of the sharing economy. Firstly, most of them rents their primary or secondary residence (56,3%), 61,4% as it is their single property. Moreover, 77,3% of them rents the entire property and not just one or more rooms. Finally, 57,5% stated their rental income amounts to less than 10.000 euros per year.

Geographically, in Italy (75%), Germany (68%), Spain (59,1%) and France (50%), respondents think that national rules are rather complicated and difficult to understand, especially when it comes to tax rules. They also stated that local authorities take a rather hostile attitude towards short-term rental services. Moreover, 34,3% assessed that the main reason to stop providing the service would be the complex and bureaucratic administrative procedures. On the other hand, providers from UK, Portugal, Austria and Ireland stated to be happy with the legislative context.