BREAKING – Airbnb crackdown: Budapest’s party quarter bans short-term rentals
A regulation that effectively makes it impossible to license new private accommodation – including Airbnb rentals – in residential buildings came into force in Erzsébetváros in September, according to a report by Spabook.net based on a reader tip. The change was introduced by the district municipality as part of a package of regulations, without any public communication, meaning it has remained almost entirely unnoticed until now.
New Airbnb licences practically eliminated
Municipal Decree 33/2025. (IX.24.) amended Erzsébetváros’s building regulations and stipulates that opening a new commercial accommodation facility – such as an Airbnb – in a residential building is practically impossible without meeting highly restrictive criteria, Spabook.net reports.
Existing private accommodation providers with valid permits may continue operating, but new entrants are essentially blocked from joining the market.
Under the new rules, a commercial accommodation facility may only be established in a residential building if:
- it operates exclusively on the ground floor,
- it occupies no more than 10% of the building’s residential floor area,
- every room meets strict size requirements,
- every room has its own private bathroom,
- in the case of guesthouses, at least six rooms and a separate breakfast area are required.
Most multi-storey residential buildings in the district are unable to meet these conditions.
Terézváros shows that a legal and market shift may follow
The impact of the tightening in Erzsébetváros could be substantial. In Terézváros, a referendum previously approved Airbnb restrictions, after which property prices began to fall. In November, Hungary’s Supreme Court ruled that the ban is proportionate and does not violate the freedom to conduct business, as it protects residents’ peace and quiet.
As a result, short-term rentals will no longer be allowed in Terézváros from 1 January 2026.
Current operators stand to gain, newcomers forced out
The new regulation reshapes the Airbnb market through a gradual transition:
- Existing licence holders remain in a strong position, as competition around them decreases.
- Accommodation businesses operating through companies may even see a rise in value, as licences can be transferred through company sales.
- Private individuals and sole traders cannot transfer their permits, meaning they cannot benefit from this when selling their property.
- The mandatory breakfast room required for guesthouses – a rule that in practice is not always justified – further limits viable locations.
Airbnb ban: The housing market and tourism sector could shift
Expected consequences of the new rules in Budapest’s 7th District:
1. Stronger position for hotels and guesthouses
With private accommodation providers pushed out, commercial accommodation businesses stand to benefit. As Erzsébetváros is one of Budapest’s most visited tourist districts, the impact could be felt not only locally but across the capital.
2. Property prices and rental rates may change
Investors focused on short-term letting may look to other districts. Over time, the supply of long-term rentals may increase, potentially slowing the rise in rental costs.
3. Shrinking Airbnb supply
The restrictions give hotels and guesthouses a competitive edge, as the level of competition from private rentals will remain fixed and gradually decline.
Why did no one notice the regulation?
The municipality published the decision in September as part of a monthly package of regulations, compressed into a single file. There was no professional consultation or communication with residents, and the district’s official news page contains no announcement regarding the extensive tightening of short-term rental rules.