An empty asset is a missed opportunity for a home, even for a day. Or at least that’s how the Israeli government sees it.
In November 2021, when the government unveiled its housing plan, a key detail was a proposal to crack down on short-term rentals: accommodation presented during the day, week or month, basically to holiday tourists through platforms like Airbnb.
Over the past year, short-term rentals have been accused of hurting hotels looking to recover from the COVID-19 shutdown and saturating the real estate market, making affordable real estate even more complicated in high-demand spaces like Tel Aviv, especially for long-term tenants.
At the heart of the challenge are housing costs that have baffled successive governments for more than a decade, each providing formulas to mitigate the crisis. Most plans, such as the maximum recently proposed by the government, have sought to lower costs through flooding. the apartment market, either accelerating new projects or discouraging the acquisition of houses for the time being for investment purposes. The existing proposal also includes the option of some kind of permit formula for short-term rentals, which implies that they can be rejected in spaces with top rental demand, which affects up to 13,000 homes according to the Ministry of Finance, and well ends down.
It’s hard to know how many short-term rentals actually exist in Israel. It is infrequently thought that the market position basically consists of owners using Airbnb or similar platforms to rent their property, or part of it, for a few days or, infrequently, for longer. , regularly to tourists. Stays are less expensive than hotels, offer other amenities or types of spaces, and cater to everyone from giant vacation families to backpackers looking for a place to sleep, domestic tourists, and even business travelers.
Airbnb has more than 10,000 “hosts” who are provided to use their homes across Israel, a spokesperson for the platform told The Times of Israel. He said most Israelis list a property, in which they live and leave to rent their space for a few days here and there.
Booking. com (which includes some hotel rooms) offers more than 2,800 homes in Israel. And while zimmers (rustic cabins, romantic suites, etc. ) are sometimes not designed to be used as houses and are usually located far from major cities, some of the 1,500 houses indexed in Zimmer. co. il houses or apartments are exchanged, and cities such as Tel Aviv and Jerusalem are added.
Most likely, the actual availability will be lower than those numbers suggest, as homeowners post homes on multiple platforms, adding local sites like Israelt.
By comparison, Israel has 56,914 hotel rooms lately, with plans for several major hotel breakthroughs scheduled to open over the next five years. Around 10,000 existing rooms are in the Tel Aviv area, with 5,000 rooms in process.
Research has indicated that, in general, the markets for hotel remnants and short-term rentals are different, as short-term rentals originally provide more self-service accommodation in remote locations. That was replaced a bit due to the COVID-19 pandemic and since then Airbnb started adding boutique hotels in late 2019. The platform and its competition will offer something very different from the hotel market.
This is partly why the Israel Hotel Association has called for stricter regulations and higher taxes for homes used as vacation rentals. to tax decreasing prices.
In 2019, Tel Aviv promised to restrict vacation properties, increasing the growing number of apartments featured to tourists on Airbnb and others, even as renters looking to live in the city have become increasingly expensive. However, before the city acted, the pandemic hit and the plan appears to have been suspended indefinitely.
Today, an estimated 9000 houses are used for short-term rentals in the Tel Aviv area, where some four million more people live. In 2021, more than 5000 new houses were started in the overcrowded city. But rents have risen 10% in the first two months of 2022 and continue to rise, making the world’s most beloved city even more beloved.
However, even though the average rent for a three-bedroom apartment in Tel Aviv exceeds NIS 10,000 ($3,000) per month, landlords can still earn more through their assets as a vacation rental.
An examination through the online page Compare the Market that analyzed Airbnb’s average monthly cost of renting assets at 90 global tourist hotspots showed that Tel Aviv had the fifth highest average consistent with the monthly cost in the world, while Jerusalem ranked tenth. In the short-term rental market, a host can earn 243% more per month than a regular (long-term) landlord in Jerusalem and 192% more than a regular landlord in Tel Aviv. 3% does not particularly decrease their profits.
Tel Aviv isn’t the only one on the list of cities that needs to restrict short-term rentals. In Paris, fines were imposed and registration requirements were imposed in an attempt to reach Airbnb. In Barcelona, the city asks Airbnb operators to have a license. And in Berlin, houses at the moment can only be rented 90 days a year.
In Sa Monica, California, which has imposed the strictest controls, rentals for any period of less than 30 days are prohibited unless the landlord also remains on the property, in which case a business license is required and operators will be required to meet a 14% occupancy tax. with tenants.
Israel’s Ministry of Tourism considers short-term rentals to be an integral component of Israel’s tourism offering. source of accommodation features in Israel, where the source of accommodation is inadequate to meet demand. In addition, short-term rental components offer a wide variety of features throughout Israel for other types of accommodation.
“Accommodation in apartments and houses responds to a global tourism trend and a preference for staying within the community, which brings together tourists and locals and serves to enrich the tourist experience.
The new new housing plan in Israel is expected to be published this month. It can move forward with a strict licensing regime, monetary disincentives, or a total ban on short-term rentals in some parts of the country.
Or, lawmakers can quietly abandon the measure in favor of other potentially more effective measures.
In Israel, no license or registration is required to manage a short-term rental. Owners are expected to sign the space as a business and pay income taxes and in some cases sales tax also applies.
But Boruch Levenson, a senior accountant at Dray and Dray, warned that tax administration has been “super competitive in seeking rental income. “
“There are other tactics to deter other people from renting other short-term monetary tools,” he told The Times of Israel, suggesting that those homes be subject to higher local tax rates on assets.
In 2016, the tax administration reported that more than 30% of homeowners who rent short-term housing have refused to pay taxes by not indicating their income. The percentage of tax evaders in Tel Aviv (48%) and Jerusalem (44%) was even higher.
While seeking to lose housing in the center of the country, the government also encouraged homeowners in outlying spaces of the country to build separate dwellings on their properties.
The small apartments are ideal for young families just starting out, as they support the expansion of the population of towns and cities away from Tel Aviv or Jerusalem. The sets are also ideal for short-term vacation rentals. Some can be discovered on Airbnb right now.
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