The mandate has the power to limit the number of days a year for which a property can be rented out.Continue reading
Short-term housing is both a housing and social, as well as a tourism issue. The problem is largely limited to Budapest, particularly the inner districts, and does not present challenges in the outer districts or rural towns. In an already volatile property market, especially within the rental sector, banning short-term rentals in some districts while allowing them in others would add further confusion.
The tourism industry in Budapest heavily relies on the sharing economy, with many visitors preferring short-term rentals that allow them to “be like a local,” writes Turizmus.com. Several trade associations argue that a total ban would be “legally questionable and economically irrational.”
They emphasize that such a move would significantly affect businesses in the city’s restaurant and attraction sectors, as well as Budapest Liszt Ferenc International Airport.
To address the issue, the associations propose a compromise between a full ban and the current regulations. One of the key suggestions is a moratorium on new short-term rental operating licenses until January 1, 2026. This would temporarily halt the certification process for new accommodations, though establishments already in the process would be allowed to complete their certification. Additionally, existing private and other accommodations must finalize their licenses by this deadline.
Another crucial proposal is the launch of an impact study. The study would analyze the accommodation market, focusing on the impact of short-term rentals on both tourism and housing.
The associations propose working with a consultancy familiar with international practices, with results due by January 31, 2025. This would provide a basis for future regulation.
In terms of regulation, the associations call for maintaining the flat-rate taxation system. They argue that it “does not impose an administrative burden on entrepreneurs” and does not encourage tax avoidance. However, they suggest reviewing the flat-rate tax and calculation methods, which have not been updated since 2018. They also recommend limiting the capacity of the short-term rental market, proposing tighter qualification criteria or restrictions on the number of days allowed for renting.
The trade associations believe that “their proposals will help create an effective regulatory solution,” balancing the needs of tourists, locals, and businesses. By taking a measured approach, they hope to address the concerns of over-tourism without damaging Budapest’s vital tourism industry.
Via Turizmus.com; Featured image: Pixabay