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Serious Restrictions on the Short-term Housing Market

Serious Restrictions on the Short-term Housing Market

Hungary
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The Hungarian Parliament passed a new act on 14 July 2020 to regulate the short-term housing market (Airbnb services). The new legislation delegates a regulating tool to the local municipalities, so that they can decide on the conditions (especially the maximum renting period), under which a flat can be rented for short term. The new law only gives a regulatory framework for the local municipalities and the Hungarian Government; specific rules are yet unknown as they have to be made from 1 August 2020. According to press releases, some of the mayors are planning to maximize the number of days for Airbnb and other similar services and would prescribe that at least half of these “allowed” days should fall between June and August.

The reasoning behind the new legislation is based on the latest housing trends. In Hungary, especially in Budapest, the renting prices are on the rise for years, which is in parallel with the western trends. Furthermore, one of the main contributing factors to the increase in price is that the average renting periods have shortened, thus locals have a harder job to find affordable rent. Authorities have received many negative feedbacks concerning the behavior of the guests and many of the owners use short-term rent as for tax avoidance.

Opposers of the new legislation, especially from the representatives of the tourism industry, argue that affordable Airbnb prices were one of the main contributing factors to the growth in tourism in the latest years and does not seem to be a fortunate decision made during the pandemic, as the tourism industry is one of the most affected by the virus.

By Eszter Kamocsay-Berta, Managing partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

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