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news 29 Dec 17

Bosnia Tightens Controls Over Boom in Rental Apartments

Authorities in Bosnia are determined make sure the growing number of people renting out their apartments for the day register the business and pay tax on the profits.

Mladen Lakic
BIRN
Sarajevo
Photo: Martaposemuckel/Pixabay

Renting out apartments for a day has become a popular way for Bosnians to making extra profit but the unclear laws in this area are seen as causing a problem for the state budget.

Now a new law, adopted three months, intends to clear up the confusion. It allows Bosnians to rent out a property without registering as a rental company.

But they must also register the apartment or house they are offering for rent and pay a 10 per cent tax on any income earned.

“The law was not clear when it came to renting out apartments in this way but with the new law, adopted three months ago, we hope to have this situation under control,” Dusanka Makivic, from the inspectorate of Republika Srpska, told BIRN.

One problem is that authority over this field has been divided in Bosnia between the two entities, Republika Srpska and the Federation of Bosnia.

The RS Inspectorate has meanwhile checked up on a random 30 apartments and found out that, while in nine cases everything was in order, and while 15 were in the process of registration, six had to stop working.

Other problems are that the RS Inspectorate lacks inspectors, and the huge number of rental apartments to be found over the internet.

“We can track those who advertise via the internet, and there is a large number of them, but our inspectors cannot enter private apartments without a court order,” Makivic noted.

"The tax administration keeps no special records on those who rent out apartments in this way, but they should be paying 10 per cent in tax from the total income earned," Nikola Salapura, from the Tax Administration of Republika Srpska, explained.

The situation in Bosnia's Federation entity is similar, where the Inspectorate could not provide detailed information on the number of rentals by the time of publication.

“For those that we have checked up on, we can say that situation is not alarming but the problem is those who remain illegal, who are difficult to track,” the Federation inspectorate told BIRN.

Renting private appartments for a day is not only interesting for foreigners who come to Bosnia but for Bosnians who use it for travels within the country.

“It is much cheaper than staying at the hotel so I use it all the time when travelling, although I cannot recall ever getting a receipt,” Amila Haracic, aged 30, told BIRN.

With the holiday season in full swing, it can be hard to find a place to stay in Sarajevo or in other larger cities in Bosnia. Rental prices of around 30 euros per day for this type of accommodation are attractive.

BIRN contacted several owners of rental apartments for the day, but none of them wanted to say whether or not they pay their taxes.

“All I can say is that we have no available rooms before January 15” one of the contacted owners told BIRN.

 

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