They may seem like an easy investment but short-term rentals can have a big impact on local residents.
Short-term holiday rentals are controversial in a lot of destinations around the world. They can be an easy investment or source of extra income for property owners in popular tourist spots.
But they can also push up prices for local residents, creating housing crises and forcing people to move away from well-visited cities. They are often more lucrative for landlords than conventional long-term rentals and can leave hundreds of properties vacant in the off-season.
As the EU gradually introduces rules and regulations that apply to the whole of the 27-nation bloc, some cities and countries are battling the growth of holiday rentals in their own way.
Paris has a special unit to crack down on illegal holiday rentals
There’s a registration process in most towns and cities across France for anyone who wants to rent out a whole house or apartment short term. Once registered, the town hall will give you a number that must be linked to your online listing before visitors can come and stay.
In Paris, the rules are even stricter. The city recently won a lengthy legal battle with Airbnb which found the online rental platform jointly responsible for the illegal subletting of a property in the city – just one part of its ongoing crackdown.
As sites like these have grown in popularity, Paris has introduced ever more restrictive legislation on what can and can’t be rented out. You can rent out your primary residence on a platform like Airbnb for 120 days a year but need to be registered with the local town hall.
For second homes or to rent out a property for longer than 120 days, you need to officially convert it to a furnished tourist accommodation.
This isn’t easy and that is on purpose. The city is struggling with a housing crisis and second homes and holiday lets don’t help.
Paris even has a dedicated unit to hunt down illegal rentals. In four years the French capital has netted €18 million in fines from people not following the rules properly.
Portugal cracks down on holiday rentals across the country
Portuguese Prime Minister Antonio Costa recently introduced a series of measures to crack down on short-term rentals. The country’s last census in 2021 revealed that there were more than 720,000 vacant housing units in Portugal.
In an effort to tame rapidly rising rental prices, the country won’t be issuing any new licenses for Airbnbs and other similar holiday lets. The only exceptions will be in rural areas that don’t suffer from urban pressures.
All licenses for holiday lets will now be reviewed every five years and a new system to control rental prices is also being introduced. Airbnb owners are also being offered a tax break if they convert their properties back into ordinary homes.
The crackdown comes as Portugal also brings an end to its Golden Visa scheme. It offered foreigners the chance to get citizenship by buying property in the country worth at least €500,000 – an attractive prospect for those looking to get EU residency.
But it has led to 10 per cent of all property purchases in Portugal being made by people overseas.
Spanish cities fight back against spiralling rental costs
Spain has also seen a boom in short-term rentals as tourism has picked up post-pandemic.
Data from the National Statistics Institute shows that the number of holiday lets is growing across the country. In some areas, as many as one in four properties are registered as tourist rentals.
There isn’t yet a nationwide law but a number of Spanish destinations are fighting back against Airbnb-style properties as the price of renting a home has spiralled.
In 2021, Barcelona became the first European city to ban short-term private room rentals. It has a dedicated team that checks for illegal listings and has them taken down.
Letting out entire homes or apartments is still allowed – but the owner of the property needs to hold the appropriate licence. And the city hasn’t issued any new licences for quite a while.
In February, Valencia announced plans to ban using homes for occasional tourist use in its historic centre. It was initially overturned by the courts but the town hall says it will continue to fight against short-term holiday lets.
Palma, the popular Mallorcan capital, was successful in its legal challenge to ban tourist rentals in apartment buildings. It means visitors can only pay to stay at single family homes which must be isolated houses or villas rather than in flats or apartments.
Across Spain, the rules vary but as holiday lets continue to increase, restrictions are only likely to get tighter.
Italian tourist hotspots limit short-term rentals
In Italy’s popular tourism hotspots, local authorities are also limiting short-term rental options. Mayor of Venice Luigi Brugnaro told the local press in March that the city centre has suffered from depopulation and now needs to fight to keep its soul.
He plans to introduce a system that will only allow homes to be rented to tourists for 120 days a year. Brugnaro said that anyone exceeding this limit would find police “at the door”.
Italy’s rental income tax rules also mean that platforms like Airbnb have to collect a 21 per cent levy and share information with tax authorities.
The rules on what property owners need to do vary from municipality to municipality. In most places, you’ll need to inform authorities that you are starting a short-term rental business.
Some will give you a number to add to your listing. Many require you to report statistics about how many guests you’ve hosted and for how long using this same code.
It’s also common for hosts to be required to provide each guest with a written short-term rental contract signed by both parties when they check-in.
The Netherlands has some of the strictest rules on holiday lets
You might have noticed that it isn’t easy to book a short-term rental on Airbnb, Booking.com or Expedia in Amsterdam. This is due to some of the strictest rules for holiday homes on this list.
To rent out your home or houseboat in Amsterdam, you’ll need a permit. It has to be your permanent address, the licence will cost you €48.10 and is only temporary.
This system limits you to renting out the property for no more than 30 nights a year, to a maximum of four people and you can’t offer bed and breakfast. Before your guests arrive, you have to let the municipality know the holiday rental period.
There are even more forms to fill in and regulations to follow if you plan to run a bed and breakfast or any other short-term holiday rental. To let out your whole home for more than 30 nights, you’ll need a specific permit like a short-term stay licence.
It isn’t easy and for good reason. As the city hopes to shed its reputation for badly behaved tourists, this is just another in a series of measures to encourage quality over quantity.
And, with the Netherlands facing a housing crisis, Amsterdam wants the homes it builds to be lived in not used as investment properties to be rented out to tourists.
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