Europe wants Airbnb and pals to cough up rental property logs The EU proposed rules this week requiring Airbnb and similar companies to share with officials the identities of hosts renting houses and apartments to tourists. It's hoped this data will give continental cities an idea of how much property is being used for the tourist trade – rather than as homes – at a time of housing …
Thing is the EU is made up of 27 countries, each of which has their own tax systems
Even now after one member that more often than not choose to go its own way instead of finding a european solution made an exit it is quite unlikely the remaining countries will agree on a tax system for the common market. Can't give away our room to manouevre, can we?
However all the member states have a common interest in making the Airbnb landlords hand over the royalties due in their country of residence so there's a good chance the european council of ministers will find a consensus in this case.
Spain already knows who rents out a room or their house using Airbnb and similar in Spain since 2018 because Airbnb have to declare it every quarter to the Spanish tax agency.
If you as a landlord in Spain don't declare it yourself in your tax return you're going to get an expensive slap on the wrist.
Not just income tax, but things like tourist tax/kurtaxe or gastekartes as well - which hurts the local economy and council, not just the national revenue/taxman.
When I stayed in a charming guesthouse in Bavaria a few years ago, part of the cost was a tourist tax which earned us our gastekarte - free public transport in the area, discounts to certain attractions, etc.
If AirBnB hosts are not registering their properties (which is not uncommon if the local authority imposes such arduous bureaucracy as "fire codes" or related safety inspections), then they won't be paying the local tourist tax or supplying their guests with their cards.
This not only deprives the local council of revenue, it can mean increased car traffic in small towns (because people aren't using free transit), and ultimately costs their guests more because they're not getting discounts at local attractions (some of these taxes are also waived for business travellers who have a letter from their employer, for the obvious reasons that people will reply about).
https://www.propertyreporter.co.uk/finance/rc-targeting-residential-landlords-with-new-nudge-campaign.html
This is another route HMRC have found to deduce landlord income.
If AirBnB don't use such a scheme then I wouldn't like to be renting out a place through them.
I assume making sure people who rent their flat declare it as income is also coincidentally a benefit for governments...
Or more accurately of benefit to normal members of society who aren't able to avoid paying tax. It is bad enough that the internation taxation system is so poorly suited to the modern globalized world that many companies can legally avoid paying much. Now companies are setting up schemes that mean people who can afford to buy a few city center properties can also avoid paying.
All this means is that the majority who can't duck, end up having to carry more of the can.
That being said, I wonder exactly how precise those reports are going to be.
Not giving out any specifics, but I rented an RB&B flat once (a few years ago). It was such a nice place that I returned the year after that.
At that point, I had the landlord's phone number. Guess what ? He told me that, instead of going through the website, I could just call him to rent and, if it worked out, he'd give me 10% off (paid in cash because duh).
I'm guessing I'm not the only one who has that kind of agreement that completely bypasses any control.
That's fairly common: landlords save 15-20% commission by renting directly and are happy to do so once they known the customers. Most countries also allow people to rent out their accommodation for a few days a year. The problems started with AirBnB allowing flats in some places to be rented almost all the time with a severe impact on rents and living conditions in places like Barcelona and Berlin.
The AirBnB model is also a very expensive one. Last year we were looking for a longer-term rental during a house move. We found a great place on AirBnB, but the service charge was huge, seemingly because it was based on the total nights. The same property was available on TripAdvisor for the same weekly rate, but a flat service fee per stay. The owner told us that she got the same money either way, so we should pick the one that worked best for us.
As always, it pays to shop around.
AirBnB have over time increased their fees.
They're basically a monopoly provider - they dominate that market - and with a monopoly, prices naturally settle at the highest level the market will bear. (With competition, prices naturally settle at the lowest level a trader can maintain a reasonable long term profit, give the costs, risks, skill and so on, involved in the trade).
I suspect that the increasing service charges are driven in part by tax policies in certain areas, as well as Airbnb's own charge structure.
Service charges are often taxed differently and tend to incur lower charges by the platform itself compared to rental fees.
Same thing is happening on other platforms - sell a book for one cent/penny and charge a hefty "shipping and handling" fee.
Berlin has a catastrophic rental market because of rent controls, imposed by the State.
The same State which would now want AirBnB data so it can control AirBnB renting in Berlin.
People were renting on AirBnB because renting legally was a God-awful nightmare. The complete Chernobyl. Two years ago, the City decided to freeze rents. My friend is a landlord, for one apartment. The frozen rent would be *less* than she pays for the mortgage. The city imposed this rule and she had to abide by it *even though there was a court case in progress against it*. That court case ruled the rent freeze illegal (but not the rent increase caps and so on, which all continue to exist). She had to cover the shortfall in rent in the period between the City bringing the law into force and the court invalidating it. I don't know if she ever got that money back from the tenant.
The basic problem is;
1. building new apartment is a nightmare
2. the State controls rents and keeps them very, very low
Result? tiny supply, huge demand, 25 people turning up to each apartment viewing.
AirBnB was a God-send. You could finally rent in Berlin - or Amsterdam, or Stockholm - all cities which totally bollocksed up rental market due to rent controls; I speak from experience, having lived and rented in all of them. In all these places the City or State has stepped in and basically banned AirBnB, and now we're back to how we were.
The solution is;
1. no controls on prices
2. make it easy to build apartments
This type of result of rent control is not uncommon. In areas where landlords have a limit on the annual increase they have little choice but to increase the rent by the maximum - simply because they can never catch up if they don't.
In areas without rent control it's not common to see annual increases, because the tenants will move if they're squeezed too much. That leaves the landlord with one or more months of lost rent, additional costs for advertising, cleaning and fixing up the place, and so forth. It takes years to catch up from that loss and thus tends to provide a pretty strong incentive to not increase the rent - or at least limit the increases.
Here in Germany, there is, thankfully, a limit on how much rent can be increased. Trouble is, it's been at 20% every three years for so long, when inflation's been at 2+% per year. Result: rents have been increasing towards the point where only the well off can afford them, everybody else scraping every last non-rent Euro together just to pay essentials.
There's no such thing as a "market" in rents. Once somebody is settled in a rented property, the costs and disruption involved in moving somewhere else are so high that it rarely happens. But the fact that all landlords increase their rents by that same 20% every three years creates the illusion of a market mechanism.
Incidentally, here, at the end of a tenancy, it's the responsibility of the tenant to restore the property to the state it was in at the start of the tenancy. That includes things like new wallpaper as well as a comprehensive clean-up. That's a further cost and disincentive to moving.
The solution, of course, is to build enough rental property until there is a surplus, such that a genuine market mechanism might take hold. Hah! Given how many politicians are private landlords exploiting the current situation, that'd be like turkeys voting for Christmas. It'd be interesting to know how much of the housing shortage is due to AirBnB and the like. I suspect it's substantial.
Nonsense: Berlin's market was in turmoil long before the cap on rents, not least due to the privatisation of very large areas of social housing by the council looking to make some quick money, again. Then came the AirBnB "revolution", which has priced a lot of people out of the centre of the city.
Your comment about your friend suggests that the rent was already too low when she bought the flat: caveat emptor, especially on buy to let properties. Either that, or you're talking shit.
Germany is short of flats in many large cities and planning regulations are, indeed, part of the problem. But a far bigger problem has been the loss of social housing and rising prices due to lax monetary policy.
I'm guessing I'm not the only one who has that kind of agreement that completely bypasses any control.
I wonder how difficult that would be to detect. Look at a property's occupation/availability figures for year 1/2/3. After 18months a host starts inexplicably taking the property off the market for periods during high season.
They might just be using it for themselves of course. But more likely they're renting privately. I suspect there are a number of forensic accounting techniques to highlight that sort of activity very easily and flag "high risk" landlords who should be audited to ensure they're declaring any income from direct-rentals (and complying with local regulation on fire safety, tourism taxes, etc).
That being said, clearly the first priority is to go after the low-hanging fruit. The majority of rentals are via the platform. This gives you a list of landlords and properties. Once you've got to a better place of people actually operating legally, you can then look at occupancy data to find the ones doing a lot of private rentals and potentially dealing off-the-books/cash-in-hand.
The business model for Airbnb is to circumvent the laws and rules. There were already many sites for renting holiday homes, but those sites needed to comply with local laws. In fact: there is seldom additional law or regulation required. So the regulation in most counties only states explicitly that Airbnb and the landlords also need to obey the law.
> The business model for Airbnb is to circumvent the laws and rules.
There are all sorts of laws and rules that landlords need to follow like safety inspections, smoke & CO monitors, energy efficiency is about to join the list. If these website are facilitating landlords bypassing these regulations then they are already presumably breaking the existing laws. Short term rentals are presumably more difficult here, some of the safety checks need to be annual (gas safety certs) while others need to be carried out at the start of each new tenancy (alarms).
Short term rental, ie. hotels, B&B have a lot more rules to follow than standard landlords, which one of the reaons why they're more expensive. AirBnB was offering slightly less than hotel pricing for private accommodation. Not only did this piss off hoteliers, though you can argue in some places that they were just adding capacity, more importantly they were displacing normal tenants because they're able to earn 10 x more than standard rents.
"Building more homes and tackling NIMBYism would probably help, too."
How much NIMBYism is there going on in big, popular cities, like the ones you cite? Should every last speck of green be built over? Should everybody have to commute ninety minutes from the suburbs?
This really is zero sum: there's a finite amount of space in city centres. The civil authorities have decided the balance of homes to hotels they want. But big tech is circumventing those decisions on an industrial scale.
I can already see the conceited headlines and responses. Such and such company will not comply with this insidious Chinese law which limits freedom and identifies our users. We will never give in to tyranny. And other balls.
-> Lawmakers believe the rules need to be passed since companies probably won't willingly hand over private data.
If they don't and the buildings are being used illegally or unlawfully, consider these companies to be party to a crime. 2 or more people involved in a crime = conspiracy.
All businesses have to follow the necessary legislation for their sector. In the case of holiday lets, hotels, B+Bs, that's meant to protect the guests. It's hardly the government "poking its nose in". Setting up a business without following the industry rules or declaring income for tax purposes makes them no different from those market stalls flogging "Guci" bags or "Ro1exes".
@goodjudge
"In the case of holiday lets, hotels, B+Bs, that's meant to protect the guests."
Of course. Sod what the guests want its what they are told they must have. Given the choice of an airBnB or a more expensive hotel the people choose. But the gov must get its cut and poke its nose in.
@Dan 55
"In a recent survey, 9/10 guests did not want to stay somewhere which burned to the ground while they slept. The remaining 1/10 were a pyromanics and believed onerous government regulation deprived landlords of an income from a key niche market."
Understandable. But since that has no relevance to what you responded to it is a worthless comment. If people were so afraid their airBnB was gonna burn down they wouldnt book them. That they book airBnB means it provides what they want. Come back better
Airbnb does indeed provide what they want, until it doesn't.
I know you're going to claim relying on stories getting around is much better than proper regulation though, because that's your thing.
@Dan 55
"Airbnb does indeed provide what they want, until it doesn't."
So its a self solving problem that people wont use airbnb then so what are you complaining about? But of course they do so you are wrong and we are back to people choosing airbnb because it provides what they want.
"I know you're going to claim relying on stories getting around is much better than proper regulation though, because that's your thing."
Not sure if that sentence was meant to make sense? Maybe a word is muddled? But I am pointing out that airbnb is in business because people choose to use airbnb because it provides what they want. Your hyperbole comment not having any impact on that.
when air bnb was rent out your couch or spare room occasionally then this was fine these days it's full to the brim with stnadard hotels and other professional landlords with multiple properties all avoiding having to declare any of that income as 'rental' because nothing regulates this part of the private transaction arrangement which was the original air bnb model.
this is what happens when you follow the money, they are just a glorified booking.com these days...
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