Landlords, Beware! Short-Term Apartment Rentals Are Living on Borrowed Time

At the end of October, the new Hospitality Industry Act entered into force and is set to take effect from 1 January 2026. The Act introduces major restrictions on short-term apartment rentals, a development that provoked strong public debate throughout the legislative process. What does this mean for platforms such as Booking.com and Airbnb, and how will they be regulated going forward? We outline the key points below.

Several months ago, in our article Renting Out Short-Term Accommodation? Major Restrictions Ahead!, we examined the draft of the new Hospitality Industry Act (“ZGos-1”), through which the Government sought to address the growing impact of short-term rentals on the housing market. Following strong public and expert criticism, the draft was slightly adjusted, and the President of the Republic formally proclaimed the new Act in October. In this article, we assess whether the initially envisaged restrictions have been largely preserved or whether the Government has, at least in part, accommodated apartment owners and proponents of a more market-driven approach.

ZGos-1 introduces a wide range of changes, particularly regarding short-term apartment rentals. Its aim is to improve conditions in the long-term rental market by curbing the rapid growth of short-term rentals and thereby encouraging owners to return their apartments to more permanent forms of housing. Alongside this, the Act establishes, for the first time, a comprehensive framework for short-term rental activities, setting out temporal and spatial restrictions and enabling municipalities to assess their impact on the local environment and adopt appropriate measures.

Short-term rentals may be offered in both owned and rented apartments. If the provider is not the sole owner, they must obtain written consent from the owner or all co-owners before offering the apartment for short-term rental.

Additional consents are required in two- or multi-unit residential buildings. In buildings with three or more units, short-term rental is permitted only if the provider obtains the consent of co-owners holding more than three-quarters of the co-ownership shares, as well as the consent of the commonhold owners of neighbouring units whose walls, floors, or ceilings adjoin the apartment being rented. In two-unit buildings, the consent of all co-owners is required. The consent of commonhold owners is valid for a maximum of three years from its issuance. Consents already in place when the Act begins to apply will remain valid until 31 December 2026, or for three years from their issuance, whichever is later. If ownership of any individual part of the building changes, the consent may be withdrawn, and if ownership of the apartment to which the consent relates changes, the consent automatically expires on the date of the ownership change.

The Act also limits the number of guests per apartment. Every guest must be provided with at least eight square metres of usable floor area, and no more than fifteen guests may occupy an individual apartment at any one time.

The key change, and the one that has generated the greatest dissatisfaction among landlords, is the time limitation on short-term rentals. This restriction applies in municipalities where short-term rentals pose a high risk of negatively affecting the long-term rental market. The Government will set criteria for identifying such municipalities by a Regulation, taking into account factors such as average housing prices and the prevalence of short-term rentals in each municipality.

In high-risk municipalities, the general rule is that an apartment may be rented on a short-term basis for no more than 60 days per calendar year. As the Mayor of Ljubljana, Zoran Janković, has repeatedly stressed, this limitation is expected to apply in Ljubljana in precisely that scope. Short-term rentals will therefore likely be permitted only during the summer months, when tourist numbers are high, and fewer students are present. High-risk municipalities may deviate from this general rule by adopting a municipal general act. They may set either a stricter regime (as low as 30 days per year) or a more permissive one, but in any case, not exceeding 270 days per calendar year.

In municipalities that are not designated as high-risk, the Act does not impose a general time restriction. Nevertheless, these municipalities may set their own annual limit, provided that it is no stricter than 60 days.

The adopted Act therefore reflects some of the criticism and introduces a somewhat more liberal approach to restricting short-term rentals. However, the Government did not ease the requirements for rentals in multi-unit residential buildings, where obtaining the necessary consents will often be (highly) demanding. In practice, short-term rentals in such buildings may, in many cases, become nearly impossible.

Ultimately, the impact of the legislation will depend heavily on how it is implemented at the local level. Municipalities will be able, at least in terms of timing, to either significantly restrict short-term rentals or allow owners relatively broad discretion in managing their property. In many cases, this will determine whether short-term rentals remain financially viable or whether owners need to consider switching to long-term rentals or even selling the property.