Croatia wants to counteract the housing shortage in the EU country by effectively restricting the rental of private apartments in the tourism industry, which is important for the country, in order to make housing more affordable for families.

Tourism accounts for about 20 percent of Croatia’s economy, and low property taxes and minimal inheritance duties encourage people to invest in rental properties. However, this has left apartments for sale almost nonexistent, leading to a rise in purchase and rental prices. Deputy Prime Minister and Construction Minister Branko Bacic said about one million apartments, or 40 percent of the total housing fund, are used for commercial purposes.

A government draft published late Thursday targets short-term rentals in apartment blocks, requiring 80 percent of building owners to approve such activities. The measure, which would primarily affect urban tourist centers such as Dubrovnik, Split and the capital Zagreb, also limits the number of tenants in rental apartments.

“The goal is to return these apartments to their original use,” Bacic said. “These apartments should come onto the market, increase supply and become more affordable for our young families and citizens, both when buying and renting.”

In the Adriatic state of 3.9 million inhabitants, there are about 100,000 registered tenants and their number has increased in recent years.

The move, which still needs to be approved by parliament, is similar to measures taken by tourist centers such as Barcelona, ​​​​which announced earlier this year that it would ban all short-term rentals in a bid to curb mass tourism and make housing more affordable for citizens.

Neighbouring Slovenia is following a similar path and is working on a law that would limit short-term rentals via platforms to a maximum of 30 days per year. The new bill still needs to be formally introduced by the government before being submitted to parliament.