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Court upholds Berlin short-term rental ban

dpadpa 8/06/2016

Berlin will continue to outlaw the likes of Airbnb after a German court rule owners can't rent out their spare flats to tourists.

Private rentals of spare flats to tourists will remain illegal in Berlin, a German court has ruled, despite property owners' arguments that the law keeps them from using the apartments as they wish.

The decision on Wednesday is another hit to the sharing economy, which threatens to disrupt established businesses by allowing people to rent items from one another, instead of having to turn to large firms for hotel rooms, rental cars and the like.

The Berlin law focuses on companies like Airbnb, which allows people to rent out their private property for short periods of time to visitors.

The law took effect on May 1.

Although controversial, the law is popular among many residents of Berlin who argue that rents have become unaffordable as more and more property has been purchased with an eye towards becoming a holiday rental, leaving little left over for those who actually live in the city.

The law does not affect the other side of Airbnb's business, whereby people rent out rooms in their homes for short periods of time, or allow others to pay to live in their homes while they are out of town.

Advocates argue the law could free up to 10,000 properties for residential use.

Anyone flouting the ban faces a fine of up to 100,000 ($A152,323).

Although the lawsuit focused on Berlin, it could have wide-reaching implications, since similar bans have been put into effect in other popular tourist destinations across Germany like Hamburg, Freiburg and Munich.

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