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Money Matters and Legal / Your Money

Airbnb agrees to collect tourist tax for the city on its rental properties in Paris

Airbnb Wikimedia Commons : H Duquesa de Cardona modified by Anissa Putois

Major rental housing platform Airbnb announced on August 25th that it will be collecting tourist tax from guests renting accommodation through them in Paris and giving it to the city, starting October 1st.

Until now, site users offering their property for rent were meant to collect the tax from guests and relay it to the municipality themselves, however many of them never did.

In Paris, the tourist tax for “non-classified touristic furnished property” — the category Airbnb properties pertain to — amounts to 0.83 euros per person, per night. Starting October 1st, reservations made in Paris will contain a line item detailing this amount, with includes the city-imposed tourist tax and the administrative district tax. It will be added to the total amount paid by guests and remitted directly to the city by the company.

Airbnb has made the change in process clear to Parisian users by detailing it on the “responsible hosting” page of their website.

According to director of Airbnb France, Nicolas Ferrary, the platform has counted “five million visitors in France since 2008, out of which 2.5 million visited since the start of 2015”.

The French capital is Airbnb’s first city in the world, with 50,000 apartments and rooms advertised in central Paris out of the 150,000 on offer in the whole of France.

Since its inception in 2008, the apartment rental site has enjoyed spectacular growth, due no doubt to the simplicity and security of its service thanks to online payments, insurance against damage caused by unscrupulous tenants, amongst other helpful features.

Allowing tourists to discover parts of the city off the beaten track and live like locals during their stay, it also provided an easy way for private property owners to capitalize on their homes by putting them in touch with potential guests through a process involving minimal paperwork and no bureaucratic headache.

It initially resembled the Couchsurfing system, where community members could provide their spare rooms to each other at very low costs. However, it increasingly showcases luxury apartments, rivaling even the most upscale hotels.

In the face of this competitor’s rapid growth in the French capital — tracked by a Wall Street Journal infographic — the Parisian hotel sector made its anguish known.

In April, the Economist reported that Airbnb’s continued growth could see it cause a 10% loss to hotels by 2016. The report initiated further protest amongst hoteliers worldwide and forced officials in various countries to crack down on the rental platform. In Barcelona, Airbnb was found in breach of local tourism laws and fined 30,000€. It also faced heat on various tax and legal issues in a number of US cities including New York, New Orleans, Malibu and even its birthplace, San Francisco.

In May, as reported in a previous article, the French government inspected 2000 properties listed on Airbnb and other rental websites in the Marais area of Paris, finding breaches in 100 of the cases.

However this didn’t have much effect on Airbnb’s growing popularity. On August 20th, Minister of Foreign Affairs Laurent Fabius, also in charge of Tourism, revealed his astonishment at the decline in attendance at Parisian hotels in the first half of 2015 despite attendance rising everywhere else in the country.

In order to curb the mounting protest, Airbnb agreed to this new centralized tax collection, smoothing over relations with the hoteliers denouncing unfair competition from the platform. As for the City of Paris, it has thanked the American company for having been “reactive” on this matter.

“We are proud to launch this simplified tax process in our number one city”, says Nicolas Ferrary in a company press release: “More people share their homes in Paris than anywhere else in the world and this new process will ensure Paris receives more revenue from our community”.

He adds “We appreciate the opportunity to work with the French government to make tourist taxes simpler for everyone”.

Airbnb has also expressed its intention to gradually expand this system to other French cities.

While Paris imposes restrictions on the website, London — Airbnb’s third city — welcomes its business with open arms. To celebrate the adoption of the “deregulation act” earlier this year, Airbnb floated a life-size home, complete with garden and picket fence, on the Thames on May 18th. The act allows Londoners to rent their housing for up to 90 days a year without having to apply for special permission.

“The Internet is changing the way we work and live, and the law needs to catch up”, explained British Secretary of communities and local government Eric Pickles when announcing the reform to rental rules in the British capital.

Amsterdam had passed a similar law in February of last year.

 

Photo credit: Wikimedia Commons / H Duquesa de Cardona; modified by Anissa Putois

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