Japan has given the nod to home owners who wish to go on sites such as Airbnb to rent out their homes for short periods.
The new rules over home sharing, or minpaku as it is known in Japan, were passed by Parliament yesterday. The Nikkei newspaper reported that these rules may come into force by January next year.
Such short-term housing rentals are notoriously difficult to police and have largely been unregulated in Japan. Across the world, such rentals often fall into a regulatory black hole or may be illegal.
In Japan, they have been banned previously, except in areas covered by the so-called National Strategic Special Zone, such as Tokyo and Osaka, where tourists are permitted to stay in rented private homes for at least three days and two nights.
The new law gives the green light to all property owners to lease their homes out to guests for up to 180 days a year accumulatively, though this might be lowered at the discretion of the local authorities. Home owners must also first declare their intent to the prefectural authorities.
They must also abide by strict hygiene standards, maintain a list of guests, and put up bulletins to notify neighbours that their homes are being used for short-term rentals. They are also legally mandated to respond promptly to any complaints from neighbours. Anyone who fails to comply may be subject to business suspension orders, and in the case of repeat violations, jail of up to six months or a fine of up to 1 million yen (S$12,500).
The move to impose an annual cap of 180 days is seen as one that kowtows to influential lobby groups protecting the interests of hoteliers and ryokan inn owners.
52k Listings in Japan - already Airbnb's most popular destination in Asia.
5m Number of guests who made use of Airbnb in Japan last year.
In Singapore, the Planning Act enacted in February makes it clear that it is illegal to rent out homes for fewer than six months. But the Urban Redevelopment Authority is studying the option of creating a category of private homes for short-term rentals.
Japan's new law comes as the country targets 40 million annual visitors by 2020, when Tokyo hosts the Olympic and Paralympic Games. It has already been rewriting tourism records for four straight years, drawing a high of 24 million tourists last year.
Minister of Land, Infrastructure, Transport and Tourism Keiichi Ishii said yesterday that he expects the law to be a boon for tourism.
Observers foresee a dire shortage of hotel rooms should the number of tourists continue to surge at current rates. Average hotel occupancy rates are already routinely above 80 per cent in Tokyo and Osaka.
Airbnb country manager for Japan, Mr Yasuyuki Tanabe, said in a statement that the Bill "provides much-needed clarity and certainty for locals who want to earn additional income by sharing their extra space with travellers from around the world".
Japan, with about 52,000 listings, is already the business' most popular destination in Asia. Last year, five million guests made use of Airbnb in Japan, where the market was worth 920 billion yen.
"We will continue to work with national and local governments to promote this responsible and sustainable framework for short-term rentals and home sharing," Mr Tanabe pledged.