Renting out through Airbnb and Booking.com

Rules for renting out through rental platforms: Airbnb and Booking.com

What are the rules for renting out through rental platforms?

Today you may rent out your own permanent home for up to 70 days a year when the rental goes through platforms that report to the Danish Tax Agency (Skattestyrelsen), and for 30 days if you rent out without them. The municipality can raise the limit to a maximum of 100 days, but the City of Copenhagen has not done so. See the rules in force. The parties’ newly proposed initiatives are therefore not a change to the law itself, but to how it is regulated. We have previously written an article about the rules on short-term rental.

What the new proposed initiatives contain

A statutory duty to provide information: The government wants to oblige rental platforms, owners and landlords to hand over relevant information to the supervisory authority, including about the landlord and the rental activity.

Blocking bookings: The government wants to allow the supervisory authority to order rental platforms to block bookings or remove listings when the rental limit has been reached.

Better options for sanctions: The government wants to raise the fines for landlords who do not follow the rules, and at the same time make it possible to fine rental platforms that do not comply with an order from the supervisory authority to block the rental calendar.

The municipalities’ role in supervision: The government wants to allow the country’s municipalities to take over supervision of compliance with the rental limits.

A statutory duty to provide information

This initiative is meant to ensure that the supervisory authority (which may be the municipality in future) can keep an eye on the landlord and the activity on the landlord’s listings. This is information the booking platform already requires landlords to fill in today before they can start renting out their units, as a general KYP (Know Your Partner) form under the EU directive.

Blocking bookings

This initiative is meant to make things harder for landlords who systematically exceed the annual rental limits, by going to the platform rather than the landlord. This will ensure that the landlord cannot exceed the limits any further. We do, however, find this problematic, as it requires a great deal of coordination between the supervisory authority and the rental platform.

Better options for sanctions

Depending on the municipality, and the 70 to 100 days a landlord may rent out a unit today, the parties propose in this initiative to introduce fine brackets of up to DKK 100,000 for breaching the set limit. This should be seen in light of the fact that you would first receive an order from the supervisory authority to block the rental calendar. From the parties’ proposal material, it is hard to tell whether the supervisory authority’s order will first be sent to the booking platform or directly to the landlord.

The municipality’s role in supervision

There needs to be a more extensive, local “task force” to enforce the rules, and that may well be the municipality. Today the Danish Agency for Planning and Rural Affairs (Plan- og Landdistriktsstyrelsen) is the supervisory authority in this area. The government therefore proposes that the task should go to the municipality, which, incidentally, can already raise the limit from 70 to a maximum of 100 days a year. We see this point as problematic, since it requires more expertise at the municipality and a whole new department to tackle it.

Setting up a digital registration system for all short-term rentals

With the initiatives currently proposed, it will be the government, landlords and booking platforms who feel the consequences of the changes, even if they do not breach the limits. This is because there is currently no natural cut-off for blocking rentals when they go beyond the allowed dates.

A central registration system that gathers data on rental units would, on the other hand, give the supervisory authorities, landlords and booking platforms much more peace of mind. It would, however, require a lot of bureaucracy and administration, given that there are currently around 21,000 rental units on Airbnb in Copenhagen. Developing this centralised digital registration system has been estimated to cost around DKK 80 to 110 million (in Danish) and to take two to three years. That is why this model has not been prioritised for now.

As an experienced property manager for short-term rental hosts, we also find that several of our clients come to us and ask us to explain the rules: what are the day limits, what are the consequences if I do not stick to them, and how do I make sure my apartment complies with the rules?

These are all valid questions, which can feel hard to navigate right now with the government’s new proposal. We help our clients with them every day, and if you are thinking of renting out your apartment, it is especially important that you take the rules into account and perhaps rent out through an experienced property manager.