Japan passes law legalizing Airbnb and other sharing economy rentals

There’s good news for Airbnb in Japan where the government has approved legislation that legalizes its service, and others like it, in the country.

The law, which was passed by Japan’s upper house on Friday, will allow home-owners to let out their property to paying guests for up to 180 days per year. They are subject to registering with local authorities who, in turn, have license to implement their own restrictions, Bloomberg reported.

Airbnb said Japan is one of its top ten markets worldwide with five million people using its service in the country over the past 12 months. The company claims its community “generated $8.3 billion of economic impact” during 2016. That figure is only likely to raise as the country’s tourism industry gears up for a boom around the 2020 Olympic games and, before then, Rugby World Cup in 2019.

“This is great news for the thousands of Japanese residents already hosting on Airbnb and 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,” Airbnb said in a blog post.

The so-called ‘Airbnb Law’ has been in progress for more than a year, and it gives the U.S. company — which was valued at $31 billion as recently as March — a much-coveted legal footing in Japan. There are still issues, however, and some Airbnb hosts may see 180 days as a limitation on their potential income.

Despite that, today’s news presents a welcome respite from challenges that Airbnb has faced with its operations in other major countries, including the U.S., where it often sits in a grey area. In New York, for example, it is banned from offering short-term lettings, while it has battled local government in cities like San Francisco, Seattle and overseas destinations such as Barcelona in Spain.