Westminster City Council has reiterated its demand for the implementation of a mandatory registration system for short-term rentals. It also suggests an overnight stay tax and the authority to penalise hosts who don’t register. The surge in properties like Airbnb has been described by the council as an ‘enforcement nightmare’.
A significant discrepancy has been highlighted by The Caterer. In one instance, a flat complex rented out a number of rooms to visitors that rivalled the count at the Ritz. Yet, the flat complex contributed a mere £92,000 in council tax in contrast to the £2.27m paid by the Ritz on Piccadilly.
Between January and July, about 11,800 properties were rented on short-term contracts. However, the council points out that these rentals don’t financially contribute to the borough’s maintenance. This gives them an advantage over traditional hospitality businesses.
Addressing the issue, Councillor Adam Hug, the Council leader, stated that the scant regulations in the sector have paved the way for an enforcement predicament. This scenario disturbs long-term inhabitants as they often find their flats turning into ‘party flats’.
He emphasised, “As we continue to face tens of millions in cuts over the next few years, the time has come to consider whether London’s local authorities might be able to decide for themselves if they want to charge a small levy, on short lets as well as hotels, as can be found in cities around the world.”
The Councillor believes this levy could be channelled towards various civic responsibilities, such as cleanliness and public safety.
Westminster City Council has suggested that the potential tax could either be a fixed amount or a percentage. The charge should be significant enough to make a difference but not deter demand. Ideally, this charge would be applied at the transaction stage, with intermediary partners or accommodation providers handling its collection.
It’s worth noting that submissions for a government consultation regarding the establishment of a registration system for short-term lets across England were concluded in June.