Iceland moves to tax Airbnb hosts
The Icelandic Government is working on home-sharing restrictions following significant growth of Airbnb in the country over the past year. The government has proposed taxing hosts who rent out properties on home-sharing platforms for more than 90 days per year, and the tax could become law as early as this week. Ólöf Ýrr Atladóttir, the director of the Icelandic Tourist Board, said in a recent interview that the legislation was not an attempt to ban Airbnb, but to establish controls and “give it a place within the [tourism] sector where it has to adhere to rules.”

The Icelandic government is working to restrict its residents from offering Airbnb rentals of more than 90 days to temper concerns over visitor impact on its landscapes off the back of high tourist numbers in recent years.

The government has proposed a tax on people who rent out properties through Airbnb for more than 90 days a year. The proposed legislation could become law this week.

The restrictions to control the rapid rise in visitors come as officials and residents of the country have expressed concerns over the impact the influx of people is having on it. The country is expected to receive 1.6 million visitors this year, a 29 per cent increase on last year.

Iceland does not have the infrastructure in place to deal with such a sharp increase in tourist numbers, so residents have opened up their homes to facilitate this. It’s why Airbnb rentals have been estimated to have increased by 124 per cent in one year.

Tourism now accounts for 34 per cent of Iceland’s export revenues, compared with 18 per cent in 2010, and is showing no signs of slowing. While this is boosting the island’s economy, which was hit badly by the global recession in 2008, it raises concerns among residents on allowing the country to be overrun by tourists.

With more tourist traps opening up in the capital’s streets, residents are wary that too many tourists will mean the loss of its culture, a city centre devoid of citizens, and increases the potential for natural landscapes to be spoiled.

To counter this, the government is taking measures to put a cap on house rentals. While two municipal councils in the country, Kirkjubæjarklaustur and Vík í Mýrdal, have already taken measures to restrict short-term tourist accommodation, the new law would apply across Iceland.

Ólöf Ýrr Atladóttir, the director of the Icelandic Tourist Board, told the Guardian the legislation was not an attempt to ban Airbnb, because many tourists preferred that experience to hotels, but to establish controls and “to give it a place within the [tourism] sector where it has to adhere to rules”.

The move comes as Airbnb is promising travellers the chance to live like a local with the app's latest features, complete with insider knowledge and tips. Through travel guidebooks and local knowledge, Airbnb hopes to open up local neighbourhoods for visitors who increasingly want to experiences places as a local would.