Irish government introduces new short-term letting rules in an attempt to alleviate the country’s growing rental crisis.
New short-term letting regulations recently came into effect nationwide. It is important that landlords and those participating in the short-term letting market are aware of the changes to the rules, as the government has provided no provisional grace period in the enforcement of the new rules.
New Rules Place Restrictions on Property Owners
These regulations were first introduced in April of this year as part of an amendment to the Planning and Development Act of 2000. The rules target apartments used for holiday rentals through Airbnb or other similar operators. The government hopes that the socially and politically-motivated regulations will limit the use of properties for short-term letting and return them to the long-term private rental market. This move is part of a larger government plan to tackle an imbalance in supply and demand has resulted in a nationwide rental crisis – driving up prices and leading to a rise in homelessness.
The new rules are similar to others introduced in major cities around the world. Homeowners who home-share or short-term let property located within designated rent pressure zones (RPZs) are now required to register with local authorities. Under the restrictions, a 90-day limit on renting out a property will be imposed, with each renting episode limited to 14 days or less.
Additionally, if property owners let a second property on a short-term basis in any RPZ, they will no longer be allowed to do this without first obtaining local planning approval. However, if a property is the owner’s main residence, they are allowed to rent out rooms on a short-term basis and the above restrictions do not apply.
Property owners already letting out property on a short-term basis will need to apply for ‘change of use’ planning permission – incurring planning permission wait times and fees – and, with high demand for housing in RPZs, it is highly unlikely that permissions will be granted.
Enforcement of New Rules
These new guidelines apply specifically to properties located within RPZs. With the recent expansion of RPZs to include an additional 19 areas, two-thirds off all residential investment properties within Ireland are now located within an RPZ, where rental increases are capped at 4% per year. RPZ designations are to remain in place until 31st December 2021.
To assist with oversight of registrations and to monitor compliance with the new regulations, the Department of Housing announced additional resources will be allocated to the Dublin City Council. However, news reports suggest that these resources have yet to actually be allocated. Prior to the introduction of the new restrictions, local authorities had struggled to enforce the previous restrictions regarding short-term lets, with local citizens often complaining of unauthorised short-term lets in their neighbourhood.
The legislation carries heavy punishment for property owners violating the new restrictions, including fines and/or criminal convictions that carry sentences of up to six months in jail. If property owners continue to violate the new rules, they could face additional fines of up to €1,500 a day for each day the breach of the rules continues.