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Impact of Building Ordinance Amendment 2023 (Bauordnungsnovelle 2023) on Short-term Rentals in Vienna

1. Understanding the Building Ordinance Amendment

2. Impacts on Short-term Rental Owners

3. How Wunderflats can support owners/landlords 

4. Public Opinions

 

1. Understanding the Building Ordinance Amendment

Updates to the Vienna Building Code were made on December 13, 2023, signifying a moment when the Austrian metropolis approaches the next level of urban development and sustainability. The Vienna State Parliament approved changes to improve energy efficiency, support environmental sustainability, and encourage responsible urban planning.

One change is the extension of the prohibition on short-term rentals in residential areas. Starting from July 1st, 2024, there is a restriction on short-term rentals exceeding 90 days annually without a special permit. 

It is well known that short-term rentals, typically made to cater to tourists, are more costly and, therefore, more profitable. As a result, homeowners who successfully rent out their homes through platforms like Airbnb or Booking.com boost their earnings.

Following the epidemic, Vienna has experienced a surge in tourism, with around 7.5 million overnight stays in the first half of the year—a number comparable to 2019.

For this reason, renting an apartment in Vienna for a long-term lease can be challenging because owners often prefer to rent apartments to tourists.

That is why renting out apartments in residential areas for short periods has been forbidden since 2018. The Bauordnung für Wien’s §7a states that residential zones must be clearly demarcated from other areas. These zones are strictly regulated to maintain housing stock and residential quality. 

But generally speaking, even after the 2018 prohibitions on commercial renting, the housing shortage in Vienna remained a problem that these restrictions have only partially addressed.

Now, these new limitations on commercial leasing should allow locals to rent a long-term apartment in Vienna more quickly and avoid competing with tourists for available space. So, the Building Ordinance Amendment aims to balance the benefits of short-term rentals and the importance of safeguarding long-term housing for residents. 

By restricting the portion of a property selected for short-term rentals, Vienna intends to prevent properties from being transformed into tourist lodgings, which could diminish residents’ long-term housing options and push rental costs even higher.

As a matter of fact, the Vienna Building Code will help the Austrian capital maintain the accessibility and affordability of long-term housing in the local community.

Restriction on commercial use of residential space/short-term rental:

We recommend that you get to know the new regulations, which include the following:

      • Restrictions on short-term rentals apply to all building floors in residential zones, not just the primary floors.

      • Short-term rentals in residential zones are prohibited except for home-sharing, which is still allowed and doesn’t need an exemption permit.

      • As of July 1, 2024, short-term rental outside residential zones is limited to 90 days annually, as per Section 119(2a) of the Building Code, as long as the owner pays the local tourist tax (“Ortstaxe“) and keeps the property as their permanent residence.

      • Sharing personal user data between building and tax authorities to monitor adherence to these regulations.

      • Increased accountability for property owners and occupants regarding violations (Section 129 of the Building Code).

      • In residential zones, exemption permits for short-term rentals may be granted under conditions outlined in Section 7a (5) of the Building Code, but only if the property owner ensures that the availability of residential housing is not reduced due to the short-term rental.

    As of July 1, 2024, hosts can request an exemption permit under Section 129 (1a) of the Building Code outside residential areas. The landlord needs to get permission in writing from the building owner(s) and ensure that less than half of the units in the building are used for commercial short-term rentals. This authorization will be valid for a maximum of five years. Following the announcement of this regulation, short-term rentals outside residential areas will still be allowed for six months without a permit to allow time for obtaining such exception permits.

    2. Impacts on Short-term Rental Owners

    Penalties

    According to Section 135 (6a) of the Building Code, simply listing an apartment in residential areas on an online platform, such as Airbnb, Booking.com, Willhaben, or other similar platforms, violates building regulations and is an administrative offense. Such a violation can result in a fine of up to EUR 50,000 or a potential two-week imprisonment.

    What will be different after July 1, 2024?

    The Building Ordinance Amendment bans profit-driven, commercial short-term rentals while permitting short-term rentals of homes during homeowners’ vacations or work travels.

    Experts point out that this restriction will create fairness between residential and tourism real estate. These innovations state that renting out housing for more than 90 days will be regarded as a commercial activity and that residential and non-residential zones will no longer directly impact the ability to rent out housing.

    Renting via online platforms

    The relationship between the City of Vienna and Airbnb has sometimes been somewhat strained. A winning lawsuit in May 2021 resulted in city-owned apartments (municipal buildings also known as Gemeindebau) no longer being allowed for subletting on platforms like Airbnb.

    Vienna is not alone in this decision; other European cities, such as London, Barcelona, and Amsterdam, have already implemented restrictions. 

    Property owners who want to continue renting their homes to tourists through Airbnb, Booking.com, and other services will need an exemption permit as of July 1, 2024. If the residential building was constructed without a housing subsidy and is not situated in a residential area, an application for such a permit is possible. Also, the building’s co-owners written consent must be submitted with the owner’s permit application. Likewise, only 50% of the building’s flats may get this kind of permission to be rented out for more than ninety days.                                                                                                        

    Due to the requirement for owners to secure specific permits for short-term renting, the cost of renting homes in Vienna to tourists will probably increase. However, it will take less time for residents or people wishing to settle down in Vienna permanently to acquire housing for their own needs.

    Tourism Vienna spokesman Walter Straßer said in an interview with the Austrian newspaper Der Standard that the revision will “take the sharing economy back to its founding narrative and help ensure that entire dwellings are not taken off the housing market.”  

    Businesses using platforms like Airbnb to rent out whole houses need to devise a fresh strategy. One possibility is repurposing the zoning, which would result in the property no longer being categorized as apartments. The new Vienna Building Code amendment has reinterpreted the definition and use of an apartment. As a result, only uses that are typically carried out in flats are allowed. Commercial use, such as short-term rental, does not constitute such an activity.

    Exemption permits

    If you’re looking to rent out a place in Vienna for a period that doesn’t meet the above criteria, you’ll have to seek an exemption down the line. So, the conditions for exemption are:

        • The location of your apartment must not be in a residential zone or an allotment.

        • No housing subsidies should have been utilized in property construction.

        •  More than 50 % of the units in the building must still be used for regular residential purposes. 

      Enforcing the ban on short-term rentals in residential areas was challenging in the past. Authorities in Vienna primarily relied on complaints to take action. However, new strategies have been implemented to improve monitoring processes. This involves authorization requirements and sharing information with tax authorities.

      3. How can Wunderflats support owners/landlords?

      Landlords and property owners may find it challenging to adjust to the changes brought about by the Building Ordinance Amendment. Wunderflats is thus ready to help you adapt to the updated rental landscape in Vienna.

      Staying Up to Date

      Wunderflats helps landlords to stay well informed about the requirements and regulations of the Building Ordinance Amendment. We offer guidance on documentation and safety measures in line with the Vienna legal framework. 

      Transitioning to Medium-Term Rentals

      Given the restrictions on short-term rentals, Wunderflats provides an ideal alternative for landlords. Exploring mid-term options through our platform can be a profitable and reliable choice. Unlike the fluctuating nature of short-term rentals, medium-term rentals span from more than 30 days to up to six months and can offer substantial advantages to many landlords:

      Reduced Administrative Stress

      Managing mid-term rentals minimizes tenant turnover, which cuts down on the time and work required for property management.

      Attracting a Wide Range of Tenants

      Business travelers, students, and digital nomads prefer mid-term rentals for flexibility and convenience. Find out more about temporary furnished housing: What it is and who uses it.

      Optimize Rental Strategies

      Wunderflats supports property owners in adapting their approaches to comply with the legal guidelines. This involves:

          • Considering changes in market dynamics, Wunderflats offers pricing tactics that aim to boost profits while maintaining an edge and adherence to regulations.

          • Platforms like Wunderflats will offer furnished apartments in the future, as well as rooms and shared spaces. This aligns perfectly with the new Austrian regulations, providing landlords with compliant and profitable alternatives to short-term rentals. 

        Join a Growing Community

        Join over 36,000 landlords who have selected Wunderflats as their go-to platform for listing furnished rentals starting from one month onwards. 

        Find out why Wunderflats is the leading choice for mid-term rental listings in cyberspace. Embrace the future of rentals and secure your investment in Vienna’s dynamic rental market. 

        Together, we can turn changes into opportunities for growth and stability.

        4. Public Opinions

        Property Owners and Hosts

        Some property owners have shared worries about the effects of the Building Ordinance Amendment. Some hosts believe these rules may be overly strict and could negatively impact their livelihoods, especially those who made property investments focusing on short-term rentals.

        The purpose of requiring the (co-) owners’ consent is to guarantee consensus regarding which flats inside the building should be exempted. In actuality, though, this kind of consent is, in most cases, illusory. It will be pretty tricky to get the apartment owners to agree on whether or not to rent out their units to tourists. Specifically, the first-come-first-serve principle, together with the 50% rule, makes reaching such an agreement more challenging. A stalemate situation will likely occur if multiple (co-)owners show interest.

        The new regulation eliminates the need for sole property owners to seek approval to rent from other parties on a short-term basis. However, although the consent requirement has been lifted, the regulation still enforces the “50% rule.” Because of this, even sole property owners are restricted from using more than half of the property space for short-term rentals.

        A new ordinance ensures that most property remains dedicated to long-term purposes. Critics argue that this rule infringes directly on property rights for owners. Property rights traditionally grant owners the freedom to utilize and oversee their properties as they wish, including renting them out. Some critics consider the 50% limit hinders property owners from taking advantage of their assets for maximum utility and financial return.

        Tourists

        Travelers appreciate the flexibility and cozy atmosphere of short-term rentals over hotels. Some travelers find the one-of-a-kind lodging choices on platforms such as Airbnb to be a plus. So, naturally, many tourists worry that the new restrictions could lead to fewer rental options.

        For instance, Amsterdam has experienced a decrease in the availability of short-term rentals due to similar regulations (Dutch hosts can only rent out for a maximum of 30 days per year). According to information from Transparent Intelligence, in 2023, Amsterdam has witnessed one of the highest declines in the number of short-term rental options since 2019, causing it to fall below the top 50 cities based on outlets.

        Residents

        Many people in the Viennese community fully support the Building Ordinance law because it focuses on tackling the lack of long-term housing and preventing homes from being turned into places for tourists to stay.

        The full text of the amendments you can find on the Austrian Legal Information System (RIS) website (RIS Document (bka.gv.at)).

         

        Please note: This article does not constitute legal advice – the information on this page has been prepared solely for your information. As we are not a law firm and act as a platform, we can and may share our estimations, but we cannot give you legal advice for your individual further proceedings.

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