New administration wants to limit Airbnb

The new City Council wants to make it better for landlords to rent long term

The incoming administration at Prague City Hall is planning restrictions on internet platforms for short-term accommodation.

Accommodation sharing in Prague has led to complaints from neighbors over noise and trash, as well as complaints from home buyers that it has driven up housing prices, and from politicians that it has deprived the city and state of income from fees and taxes.

The incoming City Hall coalition of Pirates, the United Force for Prague and Praha sobě intends to follow the example of other European cities with an amendment that would allow setting the maximum number of days that the owner of the apartment or house can rent the premises.

The Pirates before the October election said that the limit would be 60 days per year, but this is not a certainty, as that was set without input from the rest of the coalition.

A change is also now being discussed in the Chamber of Deputies, the lower house of the Czech Parliament, that would allow the city to raise the fee for a tourist who spends a night in Prague. Currently, the maximum that the law permits is Kč 15. In 2020, the city could collect up to Kč 21 and year later up to Kč 50 per person per day. Currently, Prague loses an estimated Kč 100 million a year in unpaid tourism fees, separate from unpaid taxes.

“We have to make this business less profitable for owners of Airbnb flats. We want to make it better for property owners to rent to regular tenants, so we plan to raise the fee that every Airbnb operator has to pay to the city," Hana Marvanová of United Force for Prague told daily Hospodářské noviny (HN).

Estimates suggest that renting via Airbnb can earn the landlord twice what the owner would get from a classical tenant.

The idea of regulating Airbnb in Prague is not new, and the outgoing city administration has also been looking at limits, increased fees and better enforcement.

The Czech Financial Office has data on landlords in the Czech Republic and is attempting to make those who operate Airbnb flats to pay taxes to the state. According to estimates, last year landlords from Prague failed to pay Kč 460 million to the state treasury.

In addition, the General Financial Directorate (GFŘ) has already signed an agreement on the exchange of information about Prague tenants with the Prague City Hall.

The shared accommodation services such as Airbnb are already limited by Berlin, Paris, Amsterdam and London, for example. The Spanish city of Palma de Mallorca, which depends heavily on tourism, has completely banned the service.

Representatives of tenant groups say that the original concept of services like Airbnb was good. People with a spare room could get some money by renting it on occasion. But it was never intended that people would buy entire apartment buildings just to rent them out online, while not paying the same fees as hotels are required to pay or meeting the same level of safety and other legal requirements.

A study by Colliers International shows that in Prague nearly 70 percent of Airbnb rentals are operated by entities with more than one offering and nearly two-fifths of them have more than 10 offerings.

Airbnb has been operating in the Czech Republic since 2009. In addition to Airbnb, there are similar services such as Flipkey, HomeAway, House Trip, Vacation Rentals, and Vrbo.

In 2017, people booked 1.79 million overnight stays through Airbnb in Prague, which is 61 percent higher than the previous year.

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