
The Department of Tourism has laid the groundwork to regulate Airbnb and the kicker is that it could affect the entire rental industry!
New Tourism Bill
Currently, private individuals can
freely list their property on unregulated apps such as Airbnb and the profits
from these listings go directly into the pocket of the person listing that
property. The Tourism Department seems to be suffering as a result as some of
their funding comes from the issuing of registration certificates to hotels and
guest houses at an annual cost.
The Tourism Amendment Bill has been
released for public comment and with it, the groundwork laid for the Department
of Tourism to potentially change the short-term rental industry and if
regulated correctly, the rental industry as a whole.
Airbnb will need to be registered with the
government
It is anticipated that the Department
of Tourism will require that in order to operate an Airbnb, you need to be registered
and obtain an annual certificate from the Department of Tourism that includes a
registration fee. This process has been set into motion by a request for the
public to comment on the amendment to the Tourism Act.
Short-term home rental
The Tourism Amendment Bill is
proposing to include a definition of short-term
home rental:
“short-term home rental means the
renting or leasing on a temporary basis, for reward, of a dwelling or a part
thereof, to a visitor”
It further proposes to amend the Act to include:
“7. (1) The Minister may, by notice in the Gazette and after following the consultation process contemplated in subsection (2), determine -
“7. (1) The Minister may, by notice in the Gazette and after following the consultation process contemplated in subsection (2), determine -
(a)
norms and standards for -
(v) thresholds with regard to short-term home rental;”
In practice, this means that
preparation has been made to give the Minister of the Department of Tourism the
power to propose a change in regulations to the short term rental industry
which defines exactly what constitutes a
short-term rental and to impose
restrictions such as annual registration.
Vague definition could have a knock on effect!
The knock on effect of this could be
that the Airbnb market will have less properties available; the demand for rentals
will rise as a result, and the cost of rentals rise due to new demand.
A concern with the definition of
short-term rental is the vagueness of it. The Minister will in all likelihood
set out a time period of what constitutes ‘short-term home rental’ but right
now, a one year lease could technically fall under the definition.
If the Minister introduces
regulations and fails to set a time threshold, it could inadvertently have a
major impact on the rental industry and with that a dramatic shift in whether
Airbnb or long term letting is preferable when the Tourism Amendment Bill comes
into force. This is definitely a space to watch closely!
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