Summary of our previous article on the Airbnb regulation details in Terézváros
In the autumn of 2024, the Municipality of Terézváros adopted a new regulation known as the “Airbnb regulation” (26/2024. X.31.), which from January 1, 2026 will completely ban short-term rentals. The ban covers all private and other accommodations. Violation of the rules may result in severe consequences: individuals may be fined HUF 200,000, companies up to HUF 2,000,000. In addition, the rented property may be temporarily closed for up to 45 days.
The decision is a milestone in Hungary, as District VI is the first to adopt a regulation declaring a total ban. The regulation was preceded by a local referendum, where the residents voted in favor of the ban by a narrow majority. Nationwide tightening, including related tax restrictions, is also expected to follow.
In the short term, the district can expect a significant supply shock. A large part of the current nearly 2,700 active short-term rental apartments (commonly referred to as Airbnb rentals) may return to the long-term rental market or be sold. In the medium term, this effect may spill over to neighboring inner districts (V., VII., VIII.), where part of the tourist demand may shift, while the long-term rental supply could expand. Falling housing prices and rental fees will primarily affect the segment of smaller, renovated apartments, which so far have belonged strongly to the Airbnb profile.
If you would like to explore the regulation in more detail, in our previous article you can learn what changes the Airbnb regulation brings and what it means for property owners.
The real estate rental market outcome depends on three main factors
- How clear and stable the legal environment is.
- How tourism demand in Budapest develops.
- How quickly property owners can adapt to the new situation and what strategy they follow.
Property utilization options after the Airbnb regulation
The regulation clearly states: from January 1, 2026, in Terézváros short-term accommodation services can be provided for zero days. This means that not only Airbnb-type activities are prohibited, but any similar type of accommodation activity as well.
With this ban, only three options remain: self-use, long-term rental, or sale. The regulation applies to all properties, so even in case of a sale, the property is not exempt from the law. Therefore, property owners will most likely choose one of the first two options.
Strict penalties – the Terézváros risk is not worth it
The seriousness of the decision is shown by the fact that this is the first municipal regulation in Hungary that introduces such strict measures. Rented apartments are easy to monitor, since they require municipal registration and condominium approval.
Moreover, these short-term rental activities mostly happen through the two main platforms, Airbnb and Booking.com, making it digitally simple to identify those who try to circumvent the system.
Because of the severity of the fines, the regulation’s automatic imposition of penalties without consideration, and the easy enforceability, for owners the risks of getting caught simply outweigh the benefits.
Why was the tightening introduced now in District VI?
The regulation was preceded by a local referendum, in which a narrow majority of participants voted in favor of the total ban. In public discourse, dissatisfaction among residents had been growing due to the concentration of tourists and the resulting noise, housing difficulties, and community conflicts.
Nationwide, the tightening trend is also gaining momentum. For example, the government announced that from 2025 in Budapest the flat-rate annual tax on short-term rentals will increase significantly: from HUF 38,400 to HUF 150,000. This alone greatly reduces the net return of short-term rentals, especially for owners of smaller apartments or those with lower occupancy rates.
The two factors – the district-level ban and the national tax tightening – together significantly change profitability calculations, making long-term rentals more attractive.
Supply side: how many apartments may return to the long-term rental market?
Terézváros is one of the centers of Budapest’s short-term rental market due to its downtown character. According to public data sources, there are around 2,700 active Airbnb apartments operating in the district. This accounts for 8–10% of the district’s total housing stock of around 29,000 units.
If even half of these apartments (around 1,300–1,600 properties) switch to long-term rentals for monetization, it would already represent a significant supply increase. The resulting price drop will be particularly felt in the inner-city rental market, where demand has typically exceeded supply. This will also exert downward pressure on rents in other central districts.
The mere announcement of the regulation has already triggered market movements: according to several news sources, willingness to sell has increased, and a slight price decline in smaller apartments has also been observed. This is a “front-running” phenomenon: the market reacts in advance to expected regulation.
Those who still want to utilize their apartments through rentals will find mid- and long-term rentals ideal, where professional property management can provide excellent assistance.
Contact us today and let us make renting out your apartment simple and profitable!
Demand side: how will tourism and investors react?
Tourism
Budapest is one of the most popular Central European tourist destinations, with nearly 6.7 million guest nights per year. Tourist demand will not disappear with the elimination of District VI Airbnbs, it will only be redistributed. Tourists will choose hotels and hostels in larger proportions, and with the ban in Terézváros, those looking for private accommodation may turn to other inner districts (e.g. VII., V., VIII.), driving up local Airbnb prices there.
Investors
Short-term rentals with frequently changing tenants paying two to three times higher fees than long-term renters had been a clear attraction for investors due to higher yields.
With the ban and tax tightening, however, long-term rentals are becoming more attractive. Long-term rentals involve lower costs compared to Airbnb and provide predictable monthly income.
Owners of smaller, renovated, well-located apartments will quickly switch to long-term rentals, while larger, more expensive apartments are more likely to be sold. The decision will mainly be influenced by four factors: achievable long-term yields, vacancy risk, tax burden, and the stability of the legal environment.
Expected trends in prices and rental fees
Short term (first half of 2026)
- Rental fees: a 5–15% drop is expected in District VI, especially in the 30–55 m² renovated apartments.
- Apartment prices: expected to fall by around 5% for “Airbnb-profile” properties.
- Neighboring districts: Districts VII, V, and VIII may experience a dual effect: the redirection of tourist traffic increases Airbnb profitability in those districts, but the inflow of long-term rental supply reduces long-term rents.
Medium term (1–3 years)
The market will likely find balance. If only District VI bans short-term rentals, residential use will strengthen there. Prices and rents will stabilize according to fundamentals (income, interest rates, demographics). If more districts (or the entire Budapest) follow suit, the long-term rental supply will expand citywide, broadly reducing rental fees. Despite short-term decreases, housing prices will likely rise in the medium term in line with global trends.
Risks and uncertainties – regulatory risks in District VI
It is possible that the regulation will be challenged in court, or the government may introduce a more unified capital-wide regulation that could partially or entirely override the Terézváros regulation.
Impact of the Home Start Program on housing and rental prices in District VI
The Home Start Program announced in summer 2025 is one of these uncertainties: the fixed 3% interest loan aims to benefit homebuyers, which could lead to reduced rental demand and lower rental fees (but higher housing prices). The unpredictability of the program – namely that the loan conditions are still subject to change – means the market has not yet priced it in at the time of writing. Only once conditions are finalized can it be predicted whether Home Start buyers will purchase apartments mainly for self-use or for investment purposes.
Tourism trends
An economic or geopolitical shock could reduce tourist numbers, which would positively impact the long-term rental market. During the Covid crisis of 2020–22, restrictions drastically reduced the short-term rental market, and owners shifted to the safer long-term rental option.
Black market risk
Although the rules are strict, there is always the risk that some will attempt to circumvent the system. However, the severe fines, 45-day closure, and easy enforceability serve as strong deterrents.
International experiences
In other major European cities (such as Barcelona or Amsterdam), similar regulations have already been introduced. Experience shows that restricting short-term rentals reduces the Airbnb premium and returns many apartments to the long-term rental market. This has a moderate (5–10%), but lasting impact on rental prices, particularly in city centers.
Practical strategies for property owners
Quick transition to long-term rentals
Those who react earlier have a greater chance of finding stable tenants before the big supply wave hits. However, preparation is key: one must develop the right contractual framework, pre-screen tenants, and determine the optimal price. Property management and rental experts can be of great help in this process.
Selective sales
For apartments highly optimized for Airbnb (small-sized), selling may also be a logical option. In such cases, highlighting location and condition is crucial.
Portfolio diversification
Those still considering short-term rentals can look for opportunities in other districts or even other cities. However, it must be kept in mind that the capital-wide tax tightening reduces net yields on Airbnb-type apartments everywhere.
Property management as the key to profit
Owners who previously rented exclusively short-term may face new tasks and extra work managing long-term rentals. Property management experts can quickly and professionally resolve these challenges, allowing owners to simply enjoy their returns.
Who will be the real winners of the rental market?
The Terézváros ban brings major changes to the Budapest real estate market. The shift from short-term to long-term rentals creates a new, more stable equilibrium, albeit with lower yields. It’s not a citywide price collapse, but rather a local restructuring: moderate price declines in certain segments and an expansion of rental supply.
The winners of the 2026 transition will be those owners who position their apartments on the long-term market in a timely and professional manner – whether through their own organization or with the help of professional property managers.
