Statement on the State Government’s Bill to Amend the Misuse of Property Act

The Significance of Short-Term Rentals in Bavaria

Bavaria, with its diverse and attractive offerings, is extremely popular among tourists. The tourism industry serves as a key economic driver, bolsters the local restaurant and retail sectors, and generates economic benefits that extend far beyond the tourism businesses themselves. Tourism infrastructure and local offerings supported by tourism contribute to the quality of life in the region. Especially in structurally weak regions, nature-based tourism in particular creates jobs and makes a tangible contribution to regional value creation.

Short-term rentals play a significant role in this regard. Bavaria is one of the most popular German destinations for vacations in vacation apartments or vacation homes. The vast majority of these vacation rentals are located not in cities, but in rural areas. The VIR views short-term rentals as an indispensable complement to traditional lodging establishments. They cater to specific target groups and needs, thereby increasing the diversity and appeal of the state’s overall tourism offerings. Families, vacationers with dogs, small groups, and guests who combine vacation and work in particular benefit from a diverse range of options tailored to their needs and often also cost-effective.

In 2024, the German Vacation Home Association published a study to examine the market (both private and commercial), including an evaluation of the short-term rental market in Bavaria.

The short-term rental market in Bavaria by the numbers

1. Nearly 92,000 vacation homes and apartments with a total of approximately 423,000 beds.
2. 67,000 vacation accommodations with 308,000 beds are offered by private hosts. This accounts for 73% of the total .
3. 48.8 million overnight stays annually, 43.3 million of which are with private hosts. These are not included in official statistics.
4. Gross revenue: 4.81 billion euros per year; on average, 25% of guest spending goes toward lodging; the remaining 75% flows into the local economy: restaurants (21%), retail (22%), services, transportation, the leisure industry, culture, and healthcare all benefit from vacation rental guests.
5. Vacation guests spend an average of 98.56 euros per person per day.
6. The vacation home market in Bavaria generates the equivalent of approximately 46,000 full-time jobs.
7. The government benefits from 848 million euros in tax revenue from sales tax, payroll tax, and income tax alone.

Lack of transparency in the short-term rental market

Germany lacks a comprehensive, regular survey on the scope and economic significance of short-term rentals, as private rentals (fewer than ten beds) are not included in the statistics.

1. The economic impact and, consequently, the importance of the sector are underestimated.
2. Infrastructure needs (charging stations, public transportation, waste management, healthcare) are difficult to plan for.
3. The impact on the permanent housing market is not empirically measured and is often overestimated.
4. The necessity and efficiency of regulation cannot be reliably assessed.
5. A lack of data increases the risk of disproportionate regulation.
6. The potential for tourism compatibility and visitor management is not being fully exploited.

The Challenge of Market Transparency and Data Reliability:
The EU Short-Term Rental Regulation (EU STR Regulation)

The EU Short-Term Rental Regulation (EU) 2024/1028 is intended to close these data gaps and ensure greater transparency in the market. It establishes the framework for digital registration procedures and requires platforms to submit booking data to a central authority. Host and booking data can be linked via the registration number. This will provide a precise overview of where, by whom, how often, for how long, and at what price a vacation rental is being rented to guests. This ensures transparency, data quality, and a binding legal framework for data exchange. Implementation in the member states is scheduled to take place by May 2026.

Benefits of the EU Health Insurance Regulation

1. Reliable, comprehensive (and free) data on inventory, usage, and revenue, thereby ensuring full transparency in the short-term rental market.
2. Legally secure access to data for local governments and statistical offices.
3. Elimination of the discrepancy between official and actual accommodation figures.
4. Relief for businesses: a single data submission point, an overview of municipalities with registration requirements, and a clear legal framework.
5. A foundation for fair, proportionate regulation. Disproportionate regulations will be scrutinized.
6. Mandatory registration minimizes gray-market and black-market rentals, as bookings are transmitted via specialized short-term rental platforms (tax fairness).

Fair and proportionate regulation

The EU Short-Term Rental Regulation also aims to prevent disproportionate regulations on short-term rentals that could disadvantage market participants or distort competition. According to Article 6(2) of the EU Short-Term Rental Regulation, national, regional, and local regulations must be non-discriminatory, proportionate, and compatible with Union law. Furthermore, Article 12(2) of the EU Short-Term Rental Regulation stipulates that platform data may only be transmitted if the underlying regulations comply with Union law.

Uniform Registration Procedure

The EU Short-Term Rental Regulation requires member states to establish a harmonized solution for data exchange and the registration of short-term rental listings. The federal government has tasked the Federal Network Agency with creating the required uniform data exchange point.
In Germany, the federal states are responsible for implementing the registration procedures. It is in line with the EU Short-Term Rental Regulation to strive for a uniform federal solution in order to minimize the burden on businesses and municipalities and maximize data compatibility.

1. A standardized registration process and format for registration numbers ensure full data compatibility for data exchange.
2. It makes it easier to identify incorrect entries.
3. Different formats for registration numbers significantly increase the programming effort required for the platforms.
4. A standardized solution is more cost-effective to implement and maintain.

The states and municipalities in Germany should develop a common approach regarding registration procedures for short-term residential rentals so that these procedures can be carried out as quickly and uniformly as possible (see Article 10, sentence 1 of the EU Short-Term Rental Regulation). The EU Regulation states: “To ensure that the competent authorities receive the necessary information and data without imposing a disproportionate burden on online platforms for short-term accommodation rentals and hosts, a common approach to registration procedures in the Member States must be established, limited to basic information that allows for the precise identification of the unit and the host.”

North Rhine-Westphalia has had a centralized online registration process in place since 2022. The state provides municipalities with the necessary technical infrastructure and is currently working to adapt the system to comply with the EU regulation. The advantages of this approach are clear:

• A standardized nationwide procedure with a consistent system for registration numbers,
• Guaranteed data compatibility,
• Significant simplification for municipalities in implementing and operating the registration procedure,
• Noticeably lower personnel and financial costs thanks to a harmonized solution.

Full transparency can only be achieved if as many municipalities as possible—especially those in tourist areas—introduce a registration process. That is why the barriers to entry should be kept as low as possible. In contrast, in-house systems lead to higher costs, greater administrative burdens, and limited data compatibility. In addition, businesses face increased burdens in the technical implementation of registration fields, in conducting random data checks, and in informing hosts. Standardization would significantly reduce these barriers and increase municipalities’ willingness to implement the system.

Reducing bureaucratic burdens – standardized procedures and standards

The EU Short-Term Rental Regulation imposes additional bureaucratic burdens on businesses. The VIR nevertheless welcomes and supports it, as we are convinced that the benefits of a more transparent market outweigh the costs. Nevertheless, lawmakers should ensure that these burdens are kept to a minimum. The reporting requirement affects not only large short-term rental platforms, but also small and medium-sized specialized short-term rental platforms, tourism associations, and IT service providers responsible for the technical implementation of the regulation. To put this in perspective: A medium-sized company has estimated the cost of implementing the Platform Tax Transparency Act, which imposes comparable reporting requirements, at around €60,000 to date.

The draft allows Bavarian municipalities to introduce their own digital registration procedures for short-term rentals; however, without state-wide standards, this could lead to fragmentation. Since Article 11 of the EU Regulation calls for a “common approach,” we advocate for a uniform, nationwide structure for registration numbers. Only such a standard ensures the successful implementation of EU requirements and supports digitization and the reduction of bureaucracy. Government agencies, businesses, and citizens alike benefit from clear, uniform digital procedures.

A Case for a Nationwide Solution

The German Vacation Home Association advocates for a nationally harmonized registration process with a uniform standard for registration numbers

Why a uniform registration process nationwide?

1. Avoids 16 (or more) different systems and formats for registration numbers.
2. Saves time, costs, and resources for businesses and government agencies.
3. Reduces bureaucracy and simplifies the detection of erroneous data.
4. Ensures data compatibility and facilitates data exchange.
5. Increases acceptance and compliance through standardization.

No mandatory linking of registration procedures to bylaws prohibiting misuse

The bill links the establishment of a registration procedure in municipalities to an existing bylaw on changes of use. The VIR considers this restriction to be detrimental.

Regulation of short-term rentals should be evidence-based. The necessary data can only be obtained through data-sharing and registration procedures based on the EU General Data Protection Regulation (GDPR). If municipalities are required to first enact a bylaw on misuse of residential properties before they can collect the data, that would be putting the cart before the horse.

Enacting a bylaw on changes in land use involves significant administrative and staffing costs. A municipality should have the option of establishing a registration procedure before enacting such a bylaw, in order to determine whether regulation is necessary.

Furthermore, linking a registration procedure to a land-use change ordinance runs counter to the intent of the EU General Data Protection Regulation (GDPR) to ensure the greatest possible transparency. According to the draft bill, municipalities that do not meet the requirements for a land-use change ordinance are unable to collect data for statistical purposes.

We therefore suggest that this link be eliminated and that, instead, all municipalities be given the opportunity to increase transparency through registration procedures.

Provide for a reasonable implementation period of six months

The VIR had already explained that SMEs are also affected by the implementation of the regulation. Every new registration process entails significant additional work for companies. The shortage of skilled workers, particularly in the IT sector, is causing bottlenecks and limiting companies’ ability to implement the regulation promptly.

The VIR recommends that, when introducing a digital registration system , a six-month transition period be provided for hosts and platforms. This will allow for the technical implementation of the system and the assignment of registration numbers to hosts.

Exemption from plausibility checks for registration numbers is not EU-compliant

Regarding Art. 2a(4) of the Bavarian Amendment to the Online Services Act (BayZwEWG-ÄndG), which governs the “automatic and immediate” assignment of registration numbers, the explanatory memorandum contains the following sentence on p. 10: “No substantive review of the host’s information is conducted prior to the assignment of the registration number—with the exception of plausibility checks.” The phrase “with the exception of plausibility checks” should be deleted. Art. 6(1) of the EU STR Regulation provides for the possibility of verification by authorities only “after” the registration number has been assigned (see also Art. 14, first sentence, of the EU STR Regulation). If, following the review, the authority determines that there are “obvious and serious doubts” regarding the information and documents, it may “suspend” the validity of the registration numbers and issue further orders, Art. 6(4) EU STR-VO. Art. 6 EU STR-VO regulates the official review in detail. A “plausibility check,” the scope of which is undefined and for which it is unclear in which cases it is applied, violates the conclusively worded text of Art. 6 EU STR-VO and prevents the “automatic and immediate assignment” of registration numbers provided for in Art. 4(3)(b) EU STR-VO.

Inconsistency with EU law in the definition of administrative offenses

The administrative offenses governed by Art. 4(2)(2) and (3) of the Bavarian Water Management Act Amendment (BayZwEWG-ÄndG) are limited (unlike the other administrative offenses in Art. 4 of the Bavarian Water Management Act Amendment (BayZwEWG-ÄndG), §§ 30, 33 DDG-E, and also in § 7(1)(4) ZwG M-V-ÄndG) are not limited to violations of Articles 6–9 of the EU STR-VO. However, Article 15(1) and (3) of the EU STR-VO provides only for Articles 6–9 of the EU STR-VO that Member States shall establish sanctions. The wording of Art. 15 of the EU STR-VO is exhaustive. The specification of further administrative offenses in Art. 4(2)(2) and (3) of the BayZwEWG-ÄndG is therefore contrary to EU law and must be deleted.

The Impact of Short-Term Rentals on the Housing Market

The shortage of affordable housing is a societal challenge that may require regulatory measures. However, such measures should always be based on robust evidence and take all relevant factors into account in order to ensure fair, proportionate, and effective regulation, the effects of which should also be regularly evaluated.

A recent study by Fraunhofer IAO commissioned by Airbnb in 2023 shows that short-term rentals have no significant impact on the availability of affordable housing. According to the study, all Airbnb listings accounted for just 0.3% of the total housing stock in Germany, and 0.54% in Munich; Accommodations rented for more than 90 days per year accounted for just 0.07%. Accommodations rented for more than 90 days made up only 0.07% of the stock; in Munich, the figure was 0.17%. 76% of providers are homesharers who rent out their apartments only occasionally, meaning that hardly any capacity is being withdrawn from the permanent rental market.
In tourist communities, the proportion of vacation rentals is higher; at the same time, rentals there have significant economic importance. The potential consequences of regulatory interventions must therefore be carefully weighed against one another.

In 2023, 70% of Airbnb bookings in Germany were in rural areas and small to medium-sized towns (Oxford Economics). This further contributes to the decentralization of tourism outside of metropolitan areas.

Reevaluating disproportionate licensing requirements for home-sharing platforms

The VIR expressly welcomes the fact that home-sharing is recognized in the draft bill as a legitimate form of short-term rental. However, the proposed limit of just eight weeks on the permit-free rental of one’s primary residence appears neither appropriate nor proportionate. The occasional rental of one’s primary residence has been shown to have no significant impact on the housing market; therefore, there is no discernible public interest that could justify such a strict restriction. Those who travel frequently for personal or business reasons could easily sublet their primary residence for short-term stays exceeding eight weeks without affecting the housing stock. The removal of the 8-week limit is also justified by the new provisions of the EU Short-Term Rental Regulation: the control and transparency function of the licensing requirement no longer exists due to the registration obligations introduced by the EU Short-Term Rental Regulation and the data transfer by the platforms. While it was still possible to argue before the introduction of the EU Short-Term Rental Regulation that authorities could only achieve sufficient transparency regarding rental activity through the licensing requirement, this transparency is now ensured by the registration process and the sharing of comprehensive activity data. An additional licensing requirement for the occasional rental to guests is disproportionate.

The statement is available for download here as a PDF.