publication date: January 03, 2023

Short-term rental of apartments and premises

Short-term rental of apartments consists in making a flat or premises available for the agreed use, for a specified period of time, based on agreed fee.

Short-term rental, due to the lack of its separate and comprehensive legislation, is subject to the same regulations of the Civil Code as the generally understood rental of residential premises, and therefore it is made on the basis of a rental agreement concluded between the landlord and the tenant. The premises are put into use, in the case of a short-term lease, for a fixed period of time for the fee (rent) agreed in the contract.

The importance of short-term rental in the tourism sector

The growing popularity of short-term rental is particularly noticeable in cities that attract the largest number of tourists. It is attractive to both landlords and tenants. Although the cities that are part of the European Alliance of Cities for Short-Term Rentals take the position that limited housing resources should be made available for use by those who want to live, study or work permanently, short-term rental can bring homeowners significant profits during periods of long-term rental downtime. Landlords face this phenomenon especially during the holidays. Due to the fact that in a large part of larger cities in Poland, the majority of landlords are students, during the break in the academic year there is a gap in long-term rental, which can be filled by short-term rental, in this way owners of residential premises ensure continuity of profits.

For tenants, short-term rental is attractive due to the greater freedom they have in terms of using the premises and managing their time. Naturally, the lease agreement is concluded under certain conditions approved by both parties, but they are not as rigid as those concerning, for example, hotel guests. There are no fixed check-in and check-out hours, tenants have access to household appliances and electronics, additionally, it is possible to freely choose premises depending on the tenant’s preferences.

The importance of short-term rental – statistics

According to the calculations short-term rental is carried out in approximately 40,000 premises used for such activities. Although it seems relatively small, the five largest residential markets, i.e. Warsaw, Wrocław, Kraków, Poznań, Tricity, account for half of such flats for all premises rented for a short period in Poland.

According to the estimates of the National Bank of Poland, even half of the currently sold apartments are purchased for investments, and a significant part of them will be offered as short-term rentals.

Problems arising in connection with the functioning of short-term rental

Undoubtedly, what should be indicated, taking into account the problems caused by the growing popularity of short-term rental, is the disturbance of order in housing communities by holidaymakers, focused on entertainment and disregarding the needs of permanent residents. The Commissioner for Citizens’ Rights indicates that short-term rental causes significant difficulties in effective protection of the rights of residents to undisturbed residence, which the most disturbing housing communities or cooperatives currently do not have effective tools in the fight against violations of the order and building regulations by short-term tenants who change almost every day. Due to the lack of appropriate legal measures, the owner cannot be forced to cease such activity.

Both the countries that are part of the European Alliance for Short-Term Rental and the Ministry of Sport and Tourism emphasize the need to comprehensively regulate this rental sector and control the unlimited development of STR activities.

The threat that arises due to the lack of precise legislation for short-term rental in Poland is the development of the gray rental zone and the lack of cooperation in the field of full data sharing, which is associated with the inability to enforce applicable local or regional regulations, as STR platforms refer to GDPR standards.

Although cities keep records of facilities where hotel business is conducted, they are not able to remove facilities from the register where applicable standards are regularly violated.

The above-mentioned problems related to short-term rental undoubtedly require a solution by introducing an appropriate regulation, adapted to the needs of cities where such activity is dynamically developing.

European Alliance for Short-Term Rentals against the Draft Regulation on STR published by the European Commission

On November 7, 2022, the European Commission adopted a proposal to introduce changes to the EU legislation on the regulation of short-term rental, which was addressed by the cities that are part of the European Alliance for Short-Term Rental and expressed their approval of the changes proposed by the EC. The Alliance emphasized that it appreciates the fact that the EC proposal stresses the need for a “sustainable tourism ecosystem”.

The cities particularly welcomed the proposal to introduce an obligation to share data on STR activities based on national, regional or local registration systems and to introduce national contact points where STR platforms will be required to report their STR data. Undoubtedly, this will help counteract the development of the shadow economy, which poses a threat to both the hotel industry and the consumer himself, as in the case of this form of business, the relevant authorities are unable to enforce applicable local or regional regulations. Such a possibility appears thanks to the introduction of national contact points, which will be able to make the collected data available to the competent public authorities, at their request. The member cities of the Alliance indicate that such a solution will put an end to discussions related to the compliance of data requests with GDPR standards, which is usually referred to by entrepreneurs undertaking this type of activity. The necessary clarification is provided regarding the powers of public authorities to request and use data under EU law.

Concerning the issues that the European Alliance for Short-Term Rentals believe needs clarification and refinement in the legislative process, the cities were the first to indicate that local competences in both policy-making and enforcement in this area must remain intact and fully respected.

According to the Alliance, only at the local level is it possible to find a reasonable regulatory balance ensuring a sufficient supply of housing of a decent standard and prices for long-term rental for all those who want to live and work permanently, the development of tourism and related economic interests, and the protection of appropriate living and safety conditions.

The Alliance argues with the need for the EU to adopt regulations regarding the introduction of registration or authorization systems for STRs and the methods of verification procedures for property owners, which, according to member cities, is not within the competence of the EU.

The Alliance also notes the weakness of cross-border cooperation in enforcing the data-sharing obligations imposed on STR platforms. Improved cooperation in this area could contribute to improving the reliability of the checks carried out on the data provided.

The issue of the regulation of the law on short-term rental in Poland

In Poland, it has been postulated for a long time to introduce appropriate regulations regarding short-term rental, similar to those in force in Berlin or Barcelona.

Due to the dynamic development of this type of hotel business, Poland is also affected by the problems mentioned in the article, and therefore the regulation is demanded by both city authorities, responsible for ensuring the comfort of permanent residents, and apartment owners. Differences appear in the expectations as to the method of regulation postulated by both sides. Cities propose to regulate the rules of lease in resolutions, and the owners of premises demand the introduction of a license.

Regulation by resolution

The Association of Polish Cities demands the granting of such a right, and Kraków and Sopot are the most active. In 2019, Sopot submitted proposals supported by the ZMP and the Association of Spa Municipalities, it wanted to delegate legal delegations to local governments to adopt resolutions on short-term rental.

Licence introduction

Owners of apartments for rent are aware of the threats posed by the functioning of the gray area of short-term rental, wanting to take care of the industry’s good name, they postulate the introduction of licenses on the basis of which licensed entities could register their facilities on platforms such as booking.com, AirbnB , etc. It could be received by an entity that would meet certain conditions and pay a license fee that would contribute to the commune’s budget.

Taxation of short-term rental in Poland

Short-term rental is taxable only if it can actually be described as running a business. It depends on the way the lease is run, if the landlord makes the apartment available to tenants for a few days a year, e.g. when he stays outside the city where the apartment is located, then such activity cannot be classified as business activity. In a situation where the rental offer is continuous, i.e. the advertisement is active all the time and the landlord is constantly accepting new tenants, we are dealing with the concept of running a business activity.

In such a situation, the lessor has several forms of taxation to choose from, namely:

1. flat tax of 19 percent,
2. a lump sum of 17 percent,
3. tax card,
4. taxation under general terms.

The position of the Court of Justice of the European Union on short-term rental

The Court of Justice opted for the regulation of short-term rental. In 2020, the Court decided that Member States may limit rentals for days with permits. The case concerned the French real estate market, where the Paris authorities decided to clean up the uncontrolled market of renting apartments for tourists. The French lawyers had doubts whether the requirement to obtain a permit for the provision of short-term rental services is in line with EU regulations and sent a request to the CJEU. The Court confirmed that EU countries can introduce a permit system and limit the number of apartments for short-term rental.