Czech ministry mulling stricter regulations for Airbnb rentals

The short-term apartment rental sector in the Czech Republic may see some new regulations. A plan currently being considered by the Czech Ministry of Regional Development calls for fines of up to CZK 10 million or even a ban on activity for operators of Airbnb and similar flats for violating housing rules.

The chairman of the Pirate party club in the lower house of Czech Parliament, Jakub Michálek, is behind the proposal. He told news server Seznam Zprávy that he was calling for an amendment to the Act on Business Conditions in the Tourism Industry could enter into force from January next year.

The proposal would give local municipalities more power to set rules for short-term accommodations and allow for municipalities to set higher fees.

The proposal divides professional accommodation providers from those who only rent out a flat on an occasional basis. People whose income from renting out property doesn’t exceed CZK 30,000 a year would be exempt.

There have been efforts to regulate the short-term rental sector in the past, the difference this time is that the measure would be more enforceable. “If they break the rules, the fine can reach up to CZK 10 million for the big providers. In the case of repeated offenses and the impossibility of an agreement, they are threatened with a ban on activity,” Michálek said.

Currently, the only enforceable regulation for short-term rentals is tied to the Building Act. Apartment owners who want to provide short-term accommodation services must ask the building authority for approval to change the use of the building. The property must be changed from a “building for living” to a “building of accommodation facilities.” Currently, if a building is misused, the building authority can impose a fine of up to CZK 500,000.

One provision of the new proposal would give municipalities more flexibility in setting the fees that accommodation providers have to pay per person per night. “Municipalities will decide for themselves, for example, what tourism costs they have and what fees they need to cover them to ensure the further development of the municipality and services for citizens,” Michálek said.

The Ministry of Regional Development will increase the upper limit of the accommodation fee paid to the local authorities to a maximum of CZK 100 per night, almost five times the current level.

The main reason to regulate the short-term accommodation sector is because of how it affects housing in the historical centers of cities such as Prague and Český Krumlov. Short-term housing takes up a large share of the housing stock in centers of touristy cities, though the exact numbers are hard to determine as some of it goes unreported.

Toughening the conditions for operating a short-term rental business could help to reduce noise at night. Michálek said that many touristy areas resemble a drunken party, making it difficult for residents who live in their flats year-round. This causes people to move out, and the city center then becomes “an amusement park where nobody actually lives.”

One of the main platforms for short-term accommodations, Airbnb, has taken its own steps to address the noise issue. As of June 28, there is a global ban on parties in Airbnb-listed properties. The move began as a temporary step during the pandemic and has now been made permanent. People who violate the policy risk suspension or exclusion from the platform. They say that in 2021, over 6,600 guests were banned from Airbnb globally for violating the party ban.

“We believe there is a direct correlation between our implementation of the policy in August 2020 and a 44 percent year-over-year drop globally in the rate of party reports. The ban has been well received by our Host community and we’ve received positive feedback from community leaders and elected officials,” Airbnb said in a press release.

Hotel operators have also complained about unequal conditions, as they have to comply with many regulations that do not apply to short-term accommodation providers.

In the past, right-wing parties opposed regulation of the short-term accommodation sector, as it interferes with private property rights. Michálek says he discussed his proposal with the government coalition and the opposition in an effort to find some balance, and that it has fairly broad support.

The Czech Republic has been lagging behind when it comes to regulating the short-term accommodation sector. Major cities in other European countries already have strict laws in place. Paris has some of the strictest laws and the highest fines. Hosts have to register their homes and display the registration number in their advertisements. Failure to comply carries up to a EUR 12.5 million fine. Barcelona, Berlin, Amsterdam, and London all have laws requiring host registration and/or limits on the amount of time that a property can be rented.