Airbnb Budapest – Growing Interest, Stricter RegulationsDecember 18th, 2018
Apartments delivered through Airbnb have had huge success across Europe, and this is no different in Budapest. Among the major European cities, there is a high demand for housing in such a form, but it also brings serious regulations.
The number of nights spent in Airbnb in Budapest increased by nearly 35 percent, to approximately 1.5 million. In Hungary, the weakest period of Airbnb was 2016, but the demand rose very much in recent years. The market share increased by 10.2% in 2016 and by 14.3% in 2017, making the Hungarian capital’s record one of the highest achievements among the major European cities. In Paris, this figure was 15.2%, in Barcelona 13, 2% and 11.7% in Amsterdam.
According to the report, downtown Budapest is still the most popular among tourists, while 69% of the occupiers are staying in the fifth, sixth and seventh districts. The popularity of downtown is followed by the eighth, ninth and thirteenth districts. In central locations, the room rate is higher than in other less popular, non-central districts.
In the three most popular districts, fees resemble to three-four-star hotels’. According to index.com, in June 2017, the number of Airbnb apartments was almost in excess of the capacity of hotels.
Strict regulations for district VIII.
The MSZSZ (Hungarian trade union association) and the NAV (tax office) have filed a complaint against the company. In 2016, Hungarians produced 6 billion HUF in revenue from housing - far more than data from tax returns submitted to NAV.
Thanks to this, in Budapest, in several districts, strict regulations have been introduced for homeowners providing Airbnb service, among them the latest in district VIII. The local government would tax the district homes on Airbnb - writes mérce.hu.
According to the announcement quoted by Botond Sára, Mayor of the district, the municipality will tax the so called „other accommodation service” providers on 1 January 2019 on the basis of the flat or dwellings issued, in the amount of 1820 HUF / m2 / year. This means that, for example, for a 120m2 apartment the owner would have to pay 218 000 HUF as a building tax if the apartment was issued shortly. This is mainly the portal used for short term utilization of condominium apartments, such as Airbnb. According to the document, there are 939 such accommodations in Józsefváros. So far, the apartments had to pay a communal tax, but it is also unavoidable to pay the building tax now.
Is it still worth investing in Budapest?
Although recently there have been more rules on Airbnb, but it is still lucrative to buy investment properties in the capital.
However, because of tightening regulations, it is advisable to consult a specialist before investing in Budapest to get an idea about the right place and the right business model.