The Ministry of Land, Infrastructure, Transport, and Tourism (the “MLIT”) and the Ministry of Health, Labour, and Welfare (the “MHLW”) recently decided one of the most important details regarding the new minpaku (民泊 ) law they plan to submit to the Diet next year: the maximum number of days a year a minpaku (as Airbnb-style rentals are called in Japan) may operate legally in Japan without a license.
Hotels v. Airbnb-Style Rentals
The Japanese hotel industry lobbied the government for a restriction of 30 days or less, fearing that an unfettered minpaku industry would steal potential customers. On the other hand, current operators of minpaku as well as real estate companies wishing to enter into the new minpaku market lobbied for no time restriction at all.
In the end, the MLIT and the MHLW decided they would allow minpaku to be operated for a maximum of 180 days a year, provided operators file a notification of their business to the local government.
An important reason for this half-year restriction is that the government felt that any more than 180 days a year would necessitate a change in Japanese tax law (since more than 180 days of operation would mean that minpaku should be taxed like a regular business and not a residence).
How to Interpret the Restriction?
Nevertheless, at present there is still some uncertainty regarding how “180 days or less of operation” should be interpreted in a legal sense.
Some want the restriction to apply to the maximum number of days visitors may actually stay at a minpaku, while others want the restriction to be a maximum number of days a minpaku operator may offer their property to potential customers (regardless of the number of days visitors actually occupy the premises).
In addition, under the new law minpaku may only be advertised on websites that are registered with the Japan Tourism Agency (観光庁), and regular citizens wishing to rent out a room in their residence will still need to engage a registered management company to oversee operations.
Operating in Residential Zones
An important advantage minpaku have over traditional hotels and Japanese ryokan is that minpaku are allowed to operate in areas zoned for residential use, whereas hotels and ryokan may not.
Due to the potential negative effects minpaku have on the traditional hotel industry, many cities around the world limit their operations. New York City does not allow citizens to operate a minpaku-style rental for stays of less than 30 days, unless the owner also occupies the property at the same time (i.e., as in a room in a shared apartment).
London has a maximum limitation of 90 days a year without a license. Amsterdam allows operation without a license up to 60 days a year, provided however, that neighbors give their express consent. Paris allows minpaku-style rentals to be operated without any government notification at all provided the actual owner occupies the premises at least 8 months a year, and Hamburg allows minpaku-style rentals to be operated with special government permission, as long as the actual owner occupies the property for at least 4 months a year.
Not Enough Accommodations for Tourists
The impetus for the new law is a report published by the Development Bank of Japan that in the event visitors to Japan reach the 40 million per year target by 2020, the supply of accommodations in Tokyo alone will be over 18 million short. The government hopes that the public will use their private assets to bridge this gap.
For other coverage on AirBnb in Japan, please see:
New Rules Coming for AirBnB in Japan: September 13, 2016
Government to Lower Restrictions on AirBnB-Style Rentals in Japan: August 8, 2016
Government to Submit Law Allowing AirBnB-Style Rentals in Japan: May 14, 2016
Japan Release Details of New Law on AirBnB-Style Rentals in Japan: March 16, 2016
National Framework for AirBnB Style Rentals Coming to Japan: December 11, 2015
Osaka Enacts Ordinance to Open Up AirBnB-Style Rentals: December 8, 2015
One thought on "Japanese Govt to Go Easy on Airbnb Restrictions: Hotels Lose"