Prague issues first fine against Airbnb operator since court’s “accommodation services” ruling

This summer, the Prague Municipal Court ruled that short-term rentals via platforms such as Airbnb and are in fact “accommodation services” – and must be registered and taxed accordingly. Last week, city building authorities imposed the first fine against an Airbnb operator since that ruling, for not following the same regulations as required of hotels and pensions.

The Prague City Council last January approved a proposal to join other European cities in calling on Brussels to better regulate short-term accommodation platforms targeting tourists. The explosive growth of Airbnb-style rentals had pushed locals out of city centres and exacerbated already chronic housing shortages.

Among the Czech politicians lobbying the EU executive for change is Hana Kordová Marvanová, the Prague City Councillor responsible for legislation, public administration and housing support. On the national level, she has also lobbied the Regional Development Ministry to amend and enforce housing regulations.

Ms Marvanová told Czech Radio that she believes the Prague Municipal Court decision will push building and trade authorities to enforce an already existing law that they actively monitor how residential flats are in fact being used.

Hana Kordová Marvanová | Photo: Aktron,  Wikimedia Commons,  CC BY-SA 4.0 DEED

“This decision is above all a confirmation of expert opinions that we have known for a long time. Residential apartments are not being used in accordance with building regulations.

“In principle, they serve as hotels or pensions but have not been declared as such. If someone wants to run a hotel in Prague, they must have a corresponding building inspection.”

According to the Prague Institute of Urban Planning and Development, rental platforms such as Airbnb alone list 3,600 apartments in the historic central district of Prague 1.

If city authorities determine that short-term rental flats have not been properly registered, apart from facing tax penalties, their owners risk fines – which can be imposed repeatedly and reach up to half a million crowns.

However, the first such fine imposed last week against a Prague property owner was only 20,000 crowns – a slap on the wrist. In the near term, the reclassification of Airbnb-style “tourist accommodation” will not take place on a grand scale, Ms Marvanová expects.

But she is hopeful that, in the long run, new regulations will improve the quality of life for Prague residents.

“For a long time, there have been complaints from people living in the centre that they cannot live there safely and in peace.

“That’s why we are defending ourselves against something cities elsewhere have not taken sufficient action against – namely, the depopulation of some areas.

“Prague is unique and attractive for tourists because people still live normally in the centre. We want to keep the living space there.”