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Minister Murphy Announces Regulations for Short-Term Lettings

Published on Thursday, 25 Oct 2018
Minister Eoghan Murphy

–  Bringing homes back into the long-term rental market

–  Regulating short-term letting and supporting homesharing

Eoghan Murphy T.D.,  Minister for Housing, Planning and Local Government has today (25 October, 2018)  announced new regulations in respect of short-term lettings.

“Homesharing” is where a person rents out a part or all of their home for a period of time, usually to tourists who are visiting the country. It can help home-owners meet their day-to-day bills or even pay for their own holidays.

However, as homesharing has become more popular as a form of tourism letting, it has resulted in some professional landlords withdrawing houses and apartments that would normally be rented on a long-term basis to instead rent them out as short-term lets (STLs).

This is an unregulated activity, it is not homesharing as it is typically understood, and in a time of housing shortage it is unacceptable that rental homes would be withdrawn from the letting market, particularly in our cities and large towns where rents are high and supply is still constrained.

The reforms being presented here aim to bring homes, once available on the traditional rental market, back into typical long-term renting, to regulate for the first time STLs, and to allow homesharing to continue as it was originally meant to be – a homeowner hosting people in their own home for short periods of time.

Essentially, the reforms will introduce a “one host, one home” model in areas where there is high housing demand. Homesharing will continue to be permissible where it is a person’s primary residence, and people will have to now register with their local authority as such. An annual cap of 90 days will apply for the renting out, on a short-term basis – i.e. for 14 days or less at a time, of a person’s entire home where it is their primary residence.

Where a person owns a second property and intends to let it as a STL, they will no longer be allowed to do so unless the property is already permitted to be used for tourism/short-term letting purposes. Planning permission for a change of use to STL can be sought and it will be up to each local Planning Authority to grant permissions, based on guidance that will issue from the Department of Housing, Planning and Local Government. In areas of high housing demand and, taking into account other relevant factors such as cumulative impacts, it is unlikely that permission would be granted.

Additional resources will be provided within Dublin City Council’s Planning Section to oversee the compilation of registers and to monitor enforcement. People found to not be in compliance with these changes will risk criminal conviction under forthcoming legislation.

These proposed changes will not affect the operation of holiday homes as typically understood, or longer-term flexible lettings which are provided for those coming to Ireland under employment contracts.

Further reforms may be needed in the future, working in tandem with the tourism sector and STL platforms, to regulate STL as a tourism activity (rather than to solely protect the longer-term rental stock in high demand areas in a time of housing shortage).

It is intended that the new planning changes will come into effect on 1 June 2019, to allow property owners to prepare for and adapt to the new laws. In addition to revised draft exempted development planning regulations, which have already been drafted, amendments to primary legislation will also be introduced which will underpin and strengthen the new proposals; drafting of these amendments is currently under way.

In recognition of the fact that the draft exempted development regulations will be submitted to the Oireachtas for its consideration and positive approval before coming into effect, and following on from the extensive work that the Joint Committee on Housing has already done in this complex policy area, I will be requesting the Oireachtas to conduct a short, focused review of the draft proposals, with a view to the relevant changes being finalised and endorsed before the end of the year.

 

Appendix 1 – Details of Proposed Reforms to planning legislation in relation to use of homes for short-term letting purposes

In order to ensure that entire dwellings that could be used for long-term rental accommodation are not lost to the rental market in favour of short-term letting, but seeking to facilitate the continued use of rooms within a person’s own home (known as “homesharing”) for short-term tourism letting or the short-term rental of an entire home for a limited number of days (90 days), the following changes to the planning code are being proposed:

  • From 1 June 2019, it will no longer be possible to rely on exempted development provisions to let, under short-term letting arrangements, a house or rooms in a house, that is not a person’s principal private residence. Planning permission will be required in such a case for a formal change of use.
  • ‘Short-term letting’ will be defined as ‘the use of a bedroom or bedrooms in a home as paid overnight guest accommodation for a continuous period of up to two weeks’.
  • Where a house or apartment is a person’s principal private residence, they will be permitted to rent out a room (or rooms) within their home for short-term letting without restriction (e.g. B&B-type use) but will only be allowed to sub-let their entire house without planning permission on the short-term market for a cumulative period of 90 days or less annually.
  • Homes, apartments or larger housing developments which have a specific grant of planning permission for use as holiday accommodation / short-term letting will not need to rely on the above exempted development provisions or indeed notification procedures below.
  • For the avoidance of doubt, the changes will confirm that use of any house or apartment for short-term letting use will be a ‘material change in the use’ of the structure. In other words, any new short-term letting use in a house or apartment will be deemed to be development requiring planning permission except where the above exemptions apply. 
  • In all cases where a property owner intends to rely on the amended exemptions proposed, they must now notify their local planning authority at least every year. Each planning authority will maintain a record of such notifications and can use this list as a basis for assessing the cumulative impact of properties being made available for short-term letting in an area and also for monitoring and enforcement, where appropriate.
  • While these changes to the planning code will not in some cases affect uses which were established before the changes come into effect, there will be a new requirement to notify the relevant planning authority of the continuation of such established uses, to assist planning authorities in monitoring and in planning enforcement (i.e. where a short-term letting use has resulted in the material change in use of a house or apartment, without being able to rely on an exemption, this may result in prosecution for unauthorised development).  It shall be an offence to fail to comply with these new notification requirements.

The purpose of these changes to the planning code is primarily to address the longer-term rental issues arising from the use of properties for short-term letting.  Recognising that the development of a new regulatory or licensing system for short-term letting hosts and commercial platforms would likely take time to be developed and come into force, the early introduction of these amended Regulations, which are expected to have effect from the middle of 2019, substantially addresses these issues. 

In this context, the broader regulation of tourism activity and oversight of the short-term letting market can be developed by way of specific legislation under the relevant Government Department or agency. Complementary amendments to primary planning legislation will be proposed in parallel with the amendments to the planning regulations, to reinforce and provide clarity as to when short-term letting becomes a material change in use which requires planning permission.

Details of proposed exempted development provisions for homes

In general, a person will be able to let rooms in their own house or apartment (their principal private residence) year round without planning permission as per existing planning exemptions (this includes B&B’s).

Houses and apartments will also be able to avail of a 90-day cumulative period per year exemption for short-term letting of the ‘entire home’ (i.e. for a period or periods of up to 2 weeks at a time, which add up to no more than 90 days in any calendar year).

However, to assist in the enforcement of these new rules by planning authorities, from 1 June 2019, in order to avail of these exemptions, either through letting rooms in their house or availing of the 90-day ‘entire house’ exemption, the host must inform the relevant planning authority in writing in advance of their intention to rely on the exemption, also confirming that the house is their principal private residence for the entire period of the exemption, and must provide at the end of each year details of the number of days and specific periods they relied on the 90-day ‘entire house’ exemption in that year. 

Further details

  • These policy reforms will be introduced through amendments to the Planning Regulations 2000-2018 as well as through a short piece of complementary primary legislation. 
  • The information submitted to the planning authority above will be held on a register.
  • These rules relate to planning law and will not affect any tenancy or management agreements which may already prohibit or regulate short-term letting of residential properties. The rules will also not affect any long-term residential tenancy or “rent-a-room” schemes.
  • In general, short-term letting will relate to residential property lettings (for tourism or otherwise) to different occupants for periods of 14 days or less. Residential letting periods for longer than 14 days shall not be considered to be ‘short-term letting’.
  • Amendments to primary legislation will clarify that any short-term letting of houses or apartments, except where permitted by the amended exempted development provisions proposed, will be a ‘material change in use’ which will require planning permission.
  • Any short-term letting use which is not a material change in use (and therefore does not require planning permission) and which was established prior to these changes, and which will continue after the changes come into effect, will now be required to be notified to the relevant planning authority for monitoring and enforcement purposes. Any short-term letting, which is deemed by a planning authority to be a material change in use (to be decided on a case-by-case basis) and which cannot rely on the exemptions, will require planning permission. Any unauthorised development can be the subject of planning enforcement.   
  • Each Planning Authority’s Enforcement Unit will be responsible for monitoring and enforcing these new requirements. 
  • In this regard and recognising the acute pressure on rents in the Dublin area, additional resources will be provided to Dublin City Council to assist in proactive monitoring and enforcement of these amended regulations.
  • Further guidance will be provided to Planning Authorities on policy considerations in assessing planning applications for short-term letting uses, including the consideration of residential amenity of neighbouring properties and national and local housing provision policies, including, for example, whether the property is situated within a rent pressure zone, an area experiencing high rent inflation, and whether there is a sufficient supply of rental properties available for longer-term rental in the area.  

For the avoidance of doubt, these new provisions will not effect:

  • Normal house or apartment letting, or extended-stay accommodation, or rent-a-room schemes (i.e. for periods longer than 14 days).
  • Short-term letting/ holiday accommodation/ B&B accommodation where the house or apartment has planning permission for this use.

Enforcement and sanctions

Planning enforcement is a criminal, not a civil, matter: people not in compliance with these changes risk criminal conviction under the Planning Acts. Planning Authorities will be responsible for enforcement, seeking injunctions and for court actions.

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