Canadian Curbs on Short-Term Rentals

Happy Thanksgiving, folks! I know you’d rather carve a turkey than open your inbox, so we will keep this brief.

On the menu today:

• Canada’s curbs on short-term rentals
• Palm Beach’s pricey properties
• Property tax hikes in Utah 

Canada Curbs

Canada has implemented new tax measures to address a severe shortage of rental housing. 

How? By taking away income tax deductions of companies like Airbnb, Vrbo, and others. 

The new rules, effective January 1, will apply in provinces and municipalities that prohibit short-term rentals and impact deductions such as interest expenses. 

Airbnb, for its part, disputes this claim, stating that listings in Toronto and Montreal have decreased since 2020. How much are the estimated savings? In the neighborhood of $36 million over three years starting in 2024, the government projects. 

Other countries like Australia have been battling housing shortages and considering restrictions on rentals to be the panacea. To which, Airbnb’s response is: taxing us is not the silver bullet. 

I don’t know if this is a coincidence or a very well-timed study, but an Oxford Economics report showed Airbnb’s contribution to New Zealand’s economy. 

The report said:

• In 2022, Airbnb made a $2.8-billion contribution to New Zealand's GDP and played a role in sustaining more than 22,000 jobs for locals.
• Airbnb is associated with one in every 15 jobs generated by tourism in New Zealand.
• And Airbnb business contributed for nearly 8% of the tourism industry’s contribution to the economy. 

Conversely, earlier this month a study published in Real Estate Economics cited Irvine, California as a case study to indicate that a ban on Airbnbs for 30 days or less, can have a notable impact on the city's housing market. After the city of Irvine banned Airbnb-type rentals in 2018, long-term rents dropped by 3% — a decrease of $114 a month on average. 

Palm Beach Prices

Florida has done it again — In October, Palm Beach County experienced a surge in single-family home prices, reaching a near-record high, the Palm Beach Post reported. 

The median price for existing single-family homes was $622,733, marking a 9% increase compared to October 2022 and coming close to the record set in June at $625,000. 

Realtors in Broward, Palm Beach, and St. Lucie counties reported a 3.5% rise in completed sales and an 11% increase in new listings. This indicates renewed activity in a market that had stagnated during the typical summer slowdown, despite factors such as higher interest rates and increasing insurance costs.

To put this in lending context, in November 2021, the interest rate for a 30-year fixed mortgage had increased from 3.11%, as reported by Freddie Mac. And in November this year, that number jumped to 7.44%.

Spain Trusts

Spain's anti-trust agency, CNMC, has cleared Amazon, Booking Holdings, and Tripadvisor of allegations related to participating in or facilitating fake reviews on their platforms, Skift’s Rashaad Jorden writes.

The investigation was prompted by a complaint from OCU, a prominent consumer organization in Spain. The CNMC found no evidence that the companies were involved in or enabled the publication of false opinions, and it noted their collaboration with the investigation. However, the complaint has been forwarded to a consumer rights authority for potential violations of consumer protection regulations. In October, Amazon, Booking, Tripadvisor, Expedia Group, Glassdoor, and Trustpilot jointly announced the formation of the Coalition for Trusted Reviews to combat fake online reviews.

Spanish Authorities Clear Amazon, Booking, Tripadvisor Over Alleged Fake Reviews