A recent trend among city councils has been to impose a levy on tourists staying in hotels and rented accommodation in popular tourist destinations. This can take the form of a set charge or an additional percentage of the per-night rate the guests are paying. This tourist tax is designed to offset the impact of mass tourism on cities and provide resources for local people. A criticism of vacation rentals is that this tax is often left uncollected as it is so hard to measure and enforce. Hotels are bound by law to collect this from guests and will have to pay it for every guest that stays. Vacation rentals are bound by the same law but it has always been harder to enforce every host to comply. Previously the responsibility was levied on the individual owners, but now in Amsterdam, the authorities are collecting this tax from the source.
Pressure from hotels has lead to Amsterdam becoming the first European city that demands that a vacation rental portal collects the tax on behalf of the city. Multnomah County and Portland and San Francisco in the USA also work alongside Airbnb to ensure that all tax is collected efficiently and correctly from vacation rental properties.
Hotels have always had the responsibility to pay the tourist tax to the city for every guest, but vacation rental guests have often been slipping through the cracks. Whether it was due to part-time owners being unaware of the tourist tax, or the people booking not knowing that vacation rental bookings were also subject to the tourist tax. Either way, the city was losing out on money that amounted to millions, every year. Being unaware of the tourist tax is now no longer an excuse. Vacation rental managers are expected to know that they are liable for this tax, and have the responsibility to collect it. The tourist tax will be now added to the cost per night of booking an Airbnb property in Amsterdam and collected by the site before being paid to the government.
Other cities have a tourist tax; Rome, Paris and Barcelona all levy a charge for guests to stay in the city. If this initial project is a success in Amsterdam, other portals and cities could choose to embrace collecting the tax at the source. Expecting all owners to proactively collect and pay this relatively new tax has lead to accusations that some owners simply choose to ignore it to keep their prices as low as possible. It has been argued that vacation rentals do not operate on a level playing field with other types of accommodation and have an unfair advantage by not being scrutinised as heavily when it comes to things like tax . This is one of the first steps to standardising the regulations and expectations for all types of accommodation. If Airbnb is expected to collect tourist tax then it can surely only be a matter of time before other major portals are expected to as well, eventually progressing to any vacation rental website.
The tourist tax in Amsterdam is 5.5% of the cost per night booked. Other cities choose to charge a flat fee, typically between about €1-3 per person. With a % fee, this tax could end up being an unpleasantly high amount to have to pay at the end of a holiday. Having all taxes built into the final price listed on your website will avoid the shock of a further charge at the end of their stay. If tourist tax is to be collected from vacation rental managers at the point of transaction then websites and business will have to adapt to factor it into their sites.
Punishments and fines are always applicable for owners that fail to pay the tourist tax for each night that their property is booked for. This ruling makes it easier for hosts and businesses to operate legally and helps to register vacation rentals as part of the legitimate and integral economy of the city. However, the number of portals, and smaller rental businesses mean that a ruling such as this could prove difficult to implement for smaller businesses. Airbnb is currently the only site that has this tax in place at the point of sale in Amsterdam, but other sites may have to follow suit eventually. Sites will need to have a dynamic pricing system in place to add the varied tourist tax that cities impose. If you had to collect and pay tourist tax this year, would your business be ready?