Estonian Ministry of Economy Wants Clearer Rules for Short-Term Apartment Rentals

The Estonian Ministry of Economy is proposing amendments to the Tourism Law to regulate short-term rentals of apartments and houses, which have grown rapidly in recent years via platforms like Airbnb and Booking. Currently, such accommodation is not clearly defined legally, and many providers do not follow the same requirements as professional accommodation businesses like hotels.

Minister of Economy Erkki Keldo stated that entrepreneurs have long pointed out the problem: while hotels must comply with many state regulations, short-term rental providers have no such obligations. Therefore, the ministry wants to clarify the rules to ensure transparent and fair competition in the market.

Madis Laid, Chairman of the Board of the Estonian Hotel and Restaurant Association, revealed that 86% of short-term rental market players are companies, not individuals. He emphasized that the current situation creates competition distortions because short-term rentals often fail to comply with fire safety requirements and do not register guests, making oversight difficult.

The ministry intends to require short-term rental service providers to register guests, as stipulated by the Schengen Implementing Convention. Currently, it is unclear whether this requirement applies to Airbnb and similar services. At the same time, Keldo proposed reducing requirements for hotels in areas where technological advances have made them obsolete.

Real estate analyst Tõnu Toompark predicts that introducing regulation will raise market entry barriers and possibly increase accommodation prices, limiting tourist growth. However, from a real estate development perspective, the changes will not have a significant impact, as there is no major difference for apartments between long-term and short-term rental.

The ministry plans for the amendments to take effect in 2027–2028.