In recent years, a series of regulations have impacted commercial accommodation providers, particularly those operating private and alternative lodging options.

Specific laws appear to threaten the viability of these types of accommodations, as indicated by various stakeholders in the tourism sector.

Key legislation includes the 2020 Law XCVI, which empowers municipalities to regulate the number of days private and alternative accommodations can operate within a calendar year.

This legislative power has been enacted in Budapest's VI district, where, starting January 1, 2026, such accommodations will be prohibited entirely.

Further legislative changes are encapsulated in the 2024 Law LVI, which enacts a moratorium from January 1, 2025, until December 31, 2026, preventing the registration of new private and alternative accommodations in the Budapest administrative area.

These regulations specifically target private and alternative lodging, leaving other accommodation types unaffected.

Proponents of these regulations have cited Budapest's housing crisis as a primary justification.

They suggest that the issue stems solely from private and alternative accommodations rather than from broader factors such as rising construction material costs, expensive labor charges, or the presence of residential offices and commercial properties.

Critics argue that this narrow focus fails to recognize the diverse reasons visitors seek short-term accommodation, which can include work-related trips, educational events, or healthcare needs, where alternatives may not suffice.

The long-term implications of these restrictive measures suggest potential declines in service quality, as newer establishments equipped with modern amenities may face barriers to entry, while older, potentially less well-maintained accommodations continue to operate.

The 1995 Law CXVII regarding personal income tax has undergone significant changes affecting the taxation of private accommodation providers.

The flat-rate tax system for private lodgers has been significantly altered, resulting in an increased tax burden that may incentivize these operators to consider alternative structures, such as partnerships or corporate entities, to mitigate financial strains.

The inability for private accommodations to transfer their operation rights further complicates the situation.

Should a property owner become incapacitated, the current regulations prevent them from transferring their registration to a family member or business associate, exacerbating the issue of business continuity.

Sources have indicated that while government rhetoric emphasizes the importance of micro, small, and medium-sized enterprises, recent legislative outcomes suggest a detrimental trend for smaller accommodation providers.

Concerns about inequities in the regulatory landscape have emerged, highlighting that the legal changes disproportionately impact smaller operators.

Industry representatives assert that current rules only target private accommodations, raising questions about their fairness and effectiveness in addressing the broader housing crisis in Budapest.

The Budapest Chamber of Commerce (BKIK) acknowledges that short-term rentals contribute to the housing crisis by reducing the number of properties available for long-term occupancy.

Critics argue that the regulatory approach taken by the government does not rest on solid empirical analyses regarding the responsibility of private and alternative accommodations in exacerbating housing shortages.

Statistics reveal that approximately 29,000 rooms are available for short-term rental in Budapest, surpassing the city’s 24,000 hotel rooms—a situation deemed unsustainable by tourism officials.

While many European cities have begun to limit short-term rental days, Budapest currently lacks such regulations.

In light of the moratorium and subsequent financial penalties associated with increased taxation, smaller accommodation providers face enduring challenges.

The increased annual flat-rate tax has nearly quadrupled for private accommodations in Budapest, raising serious concerns about their operational viability.

The current regulatory climate fosters uncertainty among private accommodation providers, many of whom question whether the measures are truly effective in addressing the housing crisis while expressing dissatisfaction with the government’s approach to regulation.

As the situation unfolds, stakeholders across the tourism sector remain engaged in discussions to explore potential solutions.