The Icelandic government has allocated 64 million ISK towards enforcing existing laws for home accommodations, such as Airbnb. Iceland’s Minister of Tourism, Þórdís Kolbrún Reykfjörð Gylfadóttir, told reporters that while they would prefer to keep regulation at a minimum, “not enough people play by the rules”.
Fréttablaðið reports that Airbnb has been generating considerable revenue in Iceland. It comprises 30% of the guest accommodation market share in the country, and brought in 19.4 billion ISK for those renting out their properties through the service.
However, there has been growing concern that not everyone is abiding the law for these types of accommodation. This has been having a deleterious effect on the rental market, and is depriving the capital of millions.
“We presume that once enforcement of guest accommodation laws becomes more active and visible, it will have an encouraging effect on individuals to register their properties,” Þórdís told reporters. “It will also be easier to take care of those properties that should actually be registered as businesses.”
According to data from the Housing Financing Fund (HFF), the majority of Airbnb listings posting for longer than 90 days are not registered as being places of business, as they are legally required to do. At least 1,400 Airbnb apartments are not registered correctly.
By law, anyone can register their home or a room therein on Airbnb for up to 90 days without having to register their residency as a place of business. This law was put in place due to increased pressure on the housing market, something even Airbnb owners have complained about, in the hopes that this cap would free up available space for those living here.
While most long-term listings are not legally registered as such, it bears mentioning that the City of Reykjavík has formed a special Airbnb committee tasked with rooting out those using the hosting service illegally. What effect this committee will have still remains to be seen.