Short-term rentals in Slovakia: Profitable but heavily regulated

Short-term rental of apartments through platforms such as Airbnb or Booking.com is becoming increasingly popular in Slovakia, offering significantly higher returns than traditional long-term leases. Yet, alongside the potential profits come administrative obligations, tax liabilities, and legal risks that many owners may underestimate.

Legal experts stress that tourist rentals are classified as business activities. “Short-term rental of real estate is considered a business and therefore requires a trade license or operation through a legal entity, most commonly a limited liability company,” said Erik Schwarcz of Fairsquare. Property owners are obliged to notify their local authority, register with the tax office, and comply with sector-specific regulations. Failure to do so may result in fines or, in cases of unauthorized business activity, even criminal proceedings.

Tax compliance is a particular focus of authorities. Since January 2023, platforms such as Airbnb and Booking.com have been obliged under EU’s DAC7 directive to share host revenue data with tax administrations across the European Union, including Slovakia. This measure was introduced to curb tax evasion in the short-term rental sector, which in cities like Bratislava and Košice has grown rapidly in recent years. Anyone offering short-term accommodation must file a tax return and pay income tax. In addition, accommodation tax is levied on each overnight stay, with rates set by municipalities. In Bratislava’s Old Town, for example, the fee is €3.50 per night, one of the highest in the country.

The issue of regulating short-term rentals is not unique to Slovakia. Across Europe, cities such as Amsterdam, Barcelona, and Berlin have introduced strict caps or permit systems to control the expansion of short-term lets, citing impacts on housing affordability and community cohesion. The European Commission has also implemented new rules (Regulation (EU) 2022/2065, the Digital Services Act) requiring platforms to ensure greater transparency for users and regulators.

In Slovakia, the debate continues between those who see short-term rentals as a “gold mine” and others who stress the risks and administrative demands. While higher yields are tempting, experts caution that proper licensing, tax compliance, and awareness of municipal rules are essential to avoid costly penalties.

Source: SITA