Airbnb and similar services may soon be regulated in Estonia

A man walks past a logo of Airbnb after a news conference in Tokyo, Japan, 26 Nov., 2015. (Reuters/Scanpix)
7/20/2016 9:48 AM
Category: Business

Unfair competition, scream the hotels - neither Airbnb nor Booking.com pay nearly as much tax as they do. Now, as their popularity is increasing in Estonia, the matter may soon be regulated by the state.

 

According to MP Kalle Palling (Reform), who introduced a bill to regulate rideshare service Uber’s activities in Estonia earlier this year, a similar measure could be introduced in early 2017 to see to it that home owners who list their property on Airbnb and Booking.com pay income tax on their revenues.

The Estonian Hotel and Restaurant Association finds that the kind of “sharing” those services make possible is nothing more than a business practice in unfair competition with their own.

“Our opinion has been that the conditions and the environment in which a business sector operates should be equal for all, no matter if related to paying tax or meeting legal requirements,” the association’s director, Maarika Liivamägi, said.

Liivamäe points to the Netherlands as an example. “Amsterdam has introduced legislation that regulates the possible length of stay, and under which conditions for example a private individual’s home can be rented as a hotel or other accommodation service,” she said.

According to Palling, accommodation as offered on Airbnb can’t be compared to that of a hotel, whereas taxes were a point that justified the legislator’s attention. In Uber’s case, this would be taken care of automatically. Palling is confident that a similar solution can be found for services like Airbnb and Booking.com.

Asked about issues of health and safety, Palling said that presumably private homes already met high standards, and that there was hardly a point in making a difference based on safety regulations between renting out a place for the long term or just for a few nights.

Whatever the legal development to come, short-term rental services as offered by Airbnb and similar sites are becoming ever more popular. According to real estate expert Tõnu Toompark, the current number of listings in Tallinn, a few hundred, are nothing compared to the potential of the city overall. “There are 50,000 to 60,000 rooms that could be rented out in Tallinn,” Toompark says.

Editor: Dario Cavegn

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