As of 1 September, individuals in Luxembourg offering their homes on sharing economy platforms, including Airbnb, must adhere to new legal regulations.
In 2022, these platforms facilitated a total of 33,000 stays and 309,000 overnight accommodations in the country, according to data from LfT/Eurostat. However, the burgeoning short-term rental market has faced criticism, with complaints from the hotel industry about "unfair competition" and concerns about the potential impact on the housing market.
To address these concerns, Luxembourg has introduced regulations governing the short-term rental market as part of a broader reform of the law on the right of establishment. While the Grand Duchy does not seek to ban such platforms outright, it has imposed rules that align quasi-professional holiday flat rentals more closely with the standards applied to the hotel industry, as Minister for Small and Medium-Sized Enterprises Lex Delles recently explained.
Under the new regulations, in effect since 1 September, a clear distinction has been drawn between sharing economy rentals and commercial activity. Those who rent out their property for up to 90 days in a given year face no changes. However, those exceeding this limit are required to undertake courses designed for professional hostel operators. Additionally, large rental properties must meet specific safety standards, including emergency exit requirements, and guests must fill in an accommodation certificate.
As a result of these new rules, holiday flat rentals located in a residential zone 1 or in areas where accommodation activities are restricted by regulations are now limited to 89 days.
The Federation of Hotels, Restaurants, and Bars (HORESCA) views this regulatory reform as a positive step forward, levelling the competitive playing field between traditional hotels and Airbnb-style accommodations.
However, lawyer and real estate legal expert Lex Thielen expresses doubts about whether the reform will genuinely benefit hotel operators. He argues that large-scale providers with multiple listings on platforms like Airbnb have the resources to adapt to the new regulations, while individuals who offer one or two rooms to make ends meet may be forced out of the market.
It should be noted that the reformed law's effects are not immediately apparent, as providers have until the beginning of 2024 to adjust their practices in compliance with the new rules.
