The Ministry of Economic Affairs wants clearer rules for short‑term apartment and house rentals in Estonia to bring more order to the market and ensure fairer competition.
Short‑term rentals through platforms such as Airbnb or Booking have grown rapidly in recent years, and the share of guest apartments in the accommodation market is becoming increasingly significant. Entering the market is easy — all it takes is an empty apartment — but it is not legally clear when this should be considered an economic service and what requirements must be followed.
Another question is how to ensure equal treatment and fair competition among market participants without imposing excessive restrictions. The current Estonian Tourism Act does not separately define short‑term rentals.
Minister of Economic Affairs Erkki Keldo told that businesses have long raised concerns that professional accommodation providers such as hotels must comply with many state rules, while short‑term rental operators have no obligations at all. For that reason, the ministry launched a plan to amend the Tourism Act specifically to bring more order to the short‑term rental market.
“The market needs transparent and fair competition,” Keldo said.
The ministry wants the rules for short‑term rentals to become simpler and clearer as a result of the changes. Possible solutions include clarifying accommodation service regulations in the Tourism Act or increasing the monitoring capacity of local governments and other supervisory bodies, relying primarily on existing data sources.
Madis Laid, chair of the Estonian Hotel and Restaurant Association, said 86 percent of operators in the short‑term rental market are companies, while private individuals make up only a very small share.
Laid noted that hotels currently operate with very thin margins, and if some market participants can offer very low prices, it inevitably distorts the market.
“The main distortion comes from differences in requirements. If short‑term rental apartments do not follow fire safety rules or guest registration requirements, it creates unequal competition because no one even knows who is staying where,” Laid said.
Under the ministry’s plan, short‑term rental providers would also be required to register guests. The Schengen Implementation Convention states that accommodation providers are responsible for collecting and storing guest data, and the goal now is to clarify that this also applies to Airbnb and similar short‑term rental services.
Keldo said he has also proposed reducing requirements for hotels in areas where information technology has changed practices and made some rules unnecessary.
“Fair competition means that existing hotels should not be subject to restrictive regulations that are no longer needed today,” Keldo said.
Real estate analyst Tõnu Toompark said that introducing regulations for short‑term rentals will likely raise barriers to entering the market and therefore increase accommodation prices.
“We are putting a limit on the potential growth in the number of tourists,” Toompark said when predicting the impact of the changes.
From a real estate development perspective, the planned amendment is not very significant. Toompark said that when a typical developer considers selling an apartment to a rental investor or someone running an accommodation business, the nature of the apartment itself does not change much.
The Ministry of Economic Affairs expects the changes to take effect in 2027–2028.
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