Short-term lettings may be restricted where there are grounds of public interest

The issue regarding the limits on the opening of short-term accommodation facilities has been referred to the Court of Justice of the European Union, which, in its judgment of 22 October (C-813/24), has ruled that Member States may adopt domestic legislation which, for reasons of protecting tourism and the urban environment, impose a system of prior authorisation, whilst also taking into account the needs in areas where there is a structural shortage of housing. Provided, however, that the competent authorities assess the geographical scope and impact of such facilities on housing needs in urban areas, and that their decisions are not based solely on excessive formalism.

The reference for a preliminary ruling to the Court of Justice of the European Union , which is of interest to all Member States, was made by the Brussels Court of Appeal in a case brought by a property company, specialising in short-term lettings, which had not been granted authorisation to operate a tourist accommodation facility in a property in Brussels. Before reaching a decision, the Court of Appeal sought the opinion of the European Court of Justice.

Firstly, the Court ruled that Directive 2006/123 on services in the internal market applies to national legislation on spatial and urban planning relating to matters concerning the use of immovable property, even where the activity is carried out by a person acting in a private capacity. The letting of accommodation to tourists for one or more nights, whether on a regular or occasional basis, falls within the concept of a service and, consequently, the Directive is applicable, albeit solely in respect of matters relating to services.

Therefore, the internal rules on access to the accommodation business fall within the scope of the Directive because they do not constitute ‘legislation applicable indiscriminately to the development and use of land’ or to urban and rural planning, which would have led to the exclusion of the Directive’s application. The authorisation rules – the Court observes – cannot be regarded as applicable ‘indiscriminately to territorial and urban planning’, but concern access to the accommodation business and are part of the provision of a service.

The Court has also clarified that the Services Directive does not preclude measures taken by Member States aimed at protecting both tourists and the urban environment. A system for issuing authorisations is therefore permissible, provided that it is not discriminatory against the service provider and that this condition is justified by an overriding reason in the public interest and is proportionate.