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NEW SHORT-TERM letting regulations came into effect today across Ireland.
Under these new laws, home-sharing on platforms such as Airbnb will, in effect, only be allowed where a house is a person’s primary residence inside designated ‘rent pressure zones’.
Home-sharing – people renting out a part or all of their home for a period of time, usually to tourists who are visiting the country – will now operate under strict limits and be monitored by local authorities.
So, here’s a quick explainer about who is affected by these new regulations.
Why have these regulations been brought in?
In areas of high demand, there have been concerns for some time that professional landlords are withdrawing houses and apartments that would normally be rented on a long-term basis and are instead renting them out as short-term lets, reducing the availability of long-term rental accommodation.
These new rules will essentially operate on a ‘one host, one home’ model in areas of the country where there is deemed to be a high housing demand.
This means a number of new rules – and potential penalties – for those affected by the regulations.
What if I rent out a room in my house but only occasionally?
In that case, you can rent out that room all year-long so long as that house is your ‘principal private residence’ – i.e. where you normally live.
The only way the new rules will affect you is that you’ll need to register this with your local authority.
So, what if I rent out the whole house?
This is really where the new regulations come into force.
Under the rules, an annual cap of 90 days applies for the renting out of a home and homeowners can only rent out their homes for 14 days or less at a time.
This also needs to be registered with your council.
Right. So, what if I have a second home and want to put that on the short-term rental market?
People who currently let – or want to let – a second property on a short-term basis will now have to apply for ‘change of use’ planning permission.
So, if you own an apartment that was bought as an investment and want to rent it out on Airbnb for specific periods of time you’ll need to seek a special planning permission for this type of use as it is not your principal private residence.
This process will also involve the usual planning time frames and fees attached.
However, the Department has said that in areas of high housing demand (Rent Pressure Zones) – such as Dublin or Cork – it’s unlikely that planning permission would be granted at all.
Rent Pressure Zones (RPZs) were first introduced in December 2016 as a way to address spiraling rents. Annual rent rises can not increase by more than 4% in areas considered RPZs.
If there’s a material change of use to a house or apartment and the owners have not been granted an exemption, this may result in a prosecution for unauthorised development.
Are there penalties under the new regulations?
There sure are – at least under planning laws.
The maximum fine for non-compliance with planning breaches is a €5,000 fine or six months imprisonment – or both.
If the offence continues, a person could face an additional sanction of €1,500 per day for each day the breach continues.
The local authorities will also have the power to seek a court order that any unauthorised activity must not be continued.
How will these regulations be monitored?
Well, the Department of Housing has said that additional resources will be provided within Dublin City Council’s planning section to oversee the registrations and to monitor enforcement.
People found not to be in compliance with these changes will risk criminal conviction under the legislation.
However, Dublin City Council has said it will need up to €750,000 to set up a dedicated team to enforce new short-term letting rules in the city – €350,000 more than originally thought.
The council is by far the largest in terms of short-lettings so therefore will require additional resources.
The council plans to set-up a dedicated task force with a number of additional staff members to enforce the new regulations over the coming months.
Have similar laws been implemented around the world?
Yes.
Amsterdam back in December 2016 signed an accord it hailed as “unique in Europe” with Airbnb banning rentals beyond 60 days a year.
Berlin, which has seen real estate prices soar in recent years, had months earlier passed one of the continent’s strictest regimes to hobble further Airbnb expansion entailing the rental of a maximum one room in one’s dwelling with €100,000 as a deterrent.
Even so, since May 2018, that has been relaxed to allow renting out one’s entire private apartment.
In September last year, Toronto city introduced new laws which ensure a person can only rent their home as a short-term let if it is their principal residence.
Vancouver, which introduced similar rules, said since the regulations kicked in the number of listings on Airbnb fell from 6,600 in April to 3,742 by September.
How will these new rules affect platforms like Airbnb?
The impact of prolific Airbnb-listed properties on the Irish rental market has been a point of discussion and debate for some time.
In recent months, the platform – which has serious skin in the short-term rental game – has been keen to impress upon the government the effects these new rules could have on its business model.
On several occasions from September last year, Airbnb representatives met with TDs, councillors and several ministers to discuss the proposed short-term letting regulations.
Laying out its business case to Taoiseach Leo Varadkar in late August, Airbnb wrote – in documents released to TheJournal.ie under Freedom of Information – that the company “are in full agreement with the government that there needs to be rules put in place”.
However, community support head Aisling Hassell added that these rules “need to be balanced and targeted at only those who are acting ‘commercially’ and not damage the lives of those who are benefiting from the abovementioned extra income”.
TheJournal.ie has reported that new data suggests that the majority of revenue generated on the platform comes from rentals that will be deemed ‘commercial’ under new regulations that came into effect today.
These are the houses and apartments rented for more than 90 days per year – rather than people sharing their own homes.
The data, as analysed by TheJournal.ie, suggests that around 4,978 ‘entire homes’ on the platform appear to have been rented out for more than 90 days – a good indicator that the host is not living in the property and one that will be used under the new regulations to label such a let as a commercial venture.
And, under the new rules, those commercial Airbnb operations in Rent Pressure Zones will need to apply for planning permission.
Will these new regulations be effective?
Time will tell.
Considering the delay in resourcing Dublin City Council and the slow pick-up in registering properties as short-term lets, questions have been raised about how effective the new rules will be.
Under the regulations, there is also no requirement that property listing sites hand over any information, and they face no potential penalties.
Dublin councillor Patrick Costello has said Airbnb and other platforms should be required to share data on hosts, much as the companies were already required to hand over taxpayer details to Revenue.
Others, like Sinn Féin housing spokesman Eoin Ó Broin, have said local authorities such as Dublin City Council should focus on a few, high-profile cases that involved large-scale short-term letting “to send out a very clear signal” to other operators that they meant business.
Ó Broin said: “It’s like a lot of things – you can have very good regulations, but unless there are the staff and the resources in the local authorities to be able to enforce them, their effectiveness is open to question.”
With reporting from Peter Bodkin
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RTE investigates RTE. What a challenge!
@Anne O’Hara: a I’d pay good money to hear jow Duffy justify the TV licence fee on lave-line
A lot of the major RTE over-paid have set themselves up as self-employed and setup so called agencies where they are the sole employee – all just to further skirt around tax paying levels. This is a well known trick by an elite. Its been going on for a long time.
…Not that RTE or the usual political parties are willing to do anything about it!
@Unitedpeople: not too sure what way RTE structure their contracts but certainly some of their ‘stars’ are supplying their services under company names such as ‘First Name Surname Media Services’ and so on. Presumably they invoice RTE for the work and then draw down a salary from their company. Will be interesting to see what comes of this.
@Sean @114: If they do this – they pay full PAYE, PRSI and USC on their salary. The saving primarily goes to RTE who don’t have to pay the Employer PRSI.
All salaries are subject to tax and social insurance regardless of whether you’re a proprietary director or not.
@Brinster: As they are a registered business as such, they gain extra tax refundable or deductible benefits, as technically they are creating employment – for themselves.
Not only do the chat shows not have to look beyond the staff canteen for subject matter, now current affairs can too! Seriously, RTE. We know you’re strapped for cash but how much would a Go Pro camera and a day ticket for Dublin Bus set you back?
*cough* Joe Duffy *cough*
About damn time. RTE ‘stars’ have been paying corporation tax on inflated salaries for years. You would think that they were already earning enough. Great if you are on big bucks not so good if you are a temporary employee.
Good scam while it lasted. Which I hope it doesn’t.
@Deano Cracow: I’m not sure corporation tax has much to do with things. You do no any salary drawn down is subject to the same income taxes we all pay right?
@Reg: If you’re self employed, you don’t get a salary.
@Father Hody Commody: you still paye paye on income
@ginger tomatoes i9: and usc, but slightly lower rate prsi, but get ni prsi entitlements. Employees lose out in this scenario, unless on higher contract rates ? Which suspect is the case, but even then no paid holidays, bank holidays or any benefits
@Reg: Reg. I generally agree with your comments but there is an old saying – ” The only place there isn’t a FIDDLE is in a Brass Band”.
So now our licence fee is used to pay RTE staff to investigate other RTE staff.
@Father Hody Commody: You don’t get to spend the company’s money unless you draw in down in the form of a salary.
If you use the money to pay for personal stuff (car, rent etc) then it is considered BIK and subject to full income tax, USC and PRSI. I
You clearly have no idea how this works.
So you don’t take a big salary RTE pays into the “company you take a modest salary for PAYE reckoning and laugh all the way to the bank with the rest
@marg fitzgerald: But how do you access the rest Marg? Dividends would be subject to more tax. That’s the point. The major beneficiaries of this are RTE – not the contractor.
@Brinster:
If that car is electric there is no charge from 2018…no 20% annual BIK charge, that is.
Very good news for Tesla and other El car manufacturers.
@Rory J Leonard: Yep – that’s true – introduced by the budget this year.
will probably benefit others over Tesla though. Tesla’s 2 current cars – Model T and Model S – both cost over €100k. So very expensive to buy/lease by the company to give to the employee.
Have to wait for a RHD version of the Model 3, priced at roughly €30k, that’s due early 2019.
@Brinster. You’re spot on – the real saving is to RTE on long term employee benefits and also – in these and recent times to avoid the cap on public service recruitment.
@Father Hody Commody: you do if you earn enough to pay yourself a salary
They have to applauded for this programme. You can be sure no-one working for REDACTED would get away with being critical of their company.
Not everyone in RTE is a big name star earning obscene salaries. Many are ordinary workers trying to earn a living yer RTE insists that in order to have work they must agree to sign theit rights and protections away.
In this neoliberal economy, not society, there are more attacks on ordinary workers and their rights sine the times of Jim Larkin. Zero hour contracts, minimum wage contracts, and no union recognition.
Look at the latest public transport debacle. Workers without any wage increase for 10 years are being vilified all over the media. The increases in the cost of living in those 10 years ignored. The fact that the CEO earns more than Leo and him and his staff have seen salary and bonusourt increases in those 10 years. Theit salaries are lumped in with the wages of ordinary workers to give a spin that workers are well paid and don’t deserve any increase, they’re only ordinary workers after all. To drive the publics ire against them the spin put about is disruption. We had the same with both Luas and DB workers.
Yet we see bankers getting clean away with wholesale theft of ordinary people’s money. Driving many into poverty, bad health and suicide. Even today we see yet another banker walk away from court, the case against him collapses. We know about others who got rich on the back of corrupt political practice, and are deemed untouchable, despite the evidence against them.
Ordinary people are considered to be no more than sheep to be hearded and driven for fleecing at the whim of their masters.
Enough is enough, the lessons of history have to be applied and soon.
@Dave Doyle: Very true that the reason this mechanism is prevalent is to enrich RTE through avoiding Employer PRSI, rather than enriching the employee.
For someone on €50k per year, there is usually about a 2% difference in take home, comparing Employee with Prop Director.
There’s a certain state body I applied for a job in last year that operates similarly, only offering self employed contracts. The state is setting an awful example.
If the ‘self employed’ workers are solely working for RTE then Revenue would class that as insurable employment. I would think that as a few years ago I was personally going to go self employed, coming off unemployment and my business plan was to work on a retainer for a number of businesses. I was told outright that this would be considered insurable employment and my business plan was rejected.
@Father Hody Commody: Self employment depends on much more than just whether you engage with one entity. Depends on whether you provide own tools/equipment, can choose own hours, can send a substitute and much more. The DSP has a 3 page questionnaire you submit for their review to decide whether employer/ employee or contractor relationship exists.
Not for a moment saying this wasn’t abused, but need more than just to have more than one engagement.
A house divided on itself cannot stand…..As the BBC would say…..
Was bosco self employed I wonder.
There is an old saying – ” The only place there isn’t a FIDDLE is in a Brass Band”.
So now our licence fee is used to pay High paid RTE staff to investigate other High paid RTE staff.
Bogus “self employment” is a prevalent practice, not justvwith RTÉ.
Most supposedly self employed contractors are employees in substance, if not in form.
The Revenue Commissionrrd have a very helpful policy guideline on this area.
@Fiona deFreyne: Was happening in commercial radio stations I worked in 20 years ago. Minimum wage, and file your own returns, no sick pay, no overtime and at that point I was working on one of the biggest radio shows in the country.
@Niall Sullivan: The minimum didn’t come in til the year 2000. Why was your wage 20 years ago in punts per hour and how many hours did you get?
You can add Ryanair to that list.
** Grabs popcorn **
How would the rest of the media stand up to scrutiny of their employment practices
@Mick Foley: not well at all. But they’re not getting public money so can do as they wish (almost) Ten years working 0 hours and freelance contracts was a slog and half for me. The practices in the private sector are now replicated in RTÉ. It’s a cruel game, especially for regular staff – sound engineers, broadcast assistants, researchers etc. Well done to Drivetime for looking at this. I did find it strange listening to their piece last week on same while the person doing sound was likely on 0hours. Be interesting to watch how they address this issue in the midst of upcoming voluntary redundancies etc. RTÉ is a good place and hopefully seizes the opportunities to change that are on media landscape. Again fair play to PBH and DT. Important to do this.
Huge savings in employer PRSI that doesn’t have to be paid on ‘self employed contractors’. Good to see RTE thinking about how they spend taxpayer funds … by avoiding paying those taxes.
Nooooooooooooooook
This is no different than what every major IT company in this country does. A majority of large tech companies here in Ireland, the largest ones, do this every day and have done this for years. Only a small percentage of people there are actual employees, the rest are all ‘self employed contractors’ even though they show up and do the same job. Some of the ‘self-employed’ employees have been in these positions for over ten years.
This is occuring in other areas ,not just RTE.
@Thomas McMillan: That’s what the catholics say when you give them hassle for covering up paedophilia too. Doesn’t work for that or this.
A load of shite
Same thing happened to me in Athlone
Shit , don’t dig to deep lads!
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