Authorities in the German capital Berlin have decided to soften one of Europe's strictest regimes for short-term rental firms such as Airbnb, allowing private individuals to rent out their main home without time limitations.
The new rule will come into effect on May 1.
The news comes after the Berlin administrative court confirmed in several rulings that home sharing does not impact the local housing market.
A May 2016 ruling had clamped down on the practice, allowing home owners to only renting out one room via specialised web portals such as Airbnb or Wimdu, with a €100,000 fine available for those breaching the rule.
Airbnb Germany head Alexander Schwarz hailed the rule change: "We welcome that Berlin embraces home-sharing in creating new rules that benefit regular people who want to share their homes with travellers".
Under the new law owners will only be allowed to rent out second or holiday homes for 90 days a year. Rents have traditionally been low in Berlin compared with other major German cities.
But they have risen substantially in recent years, prompting city authorities to crackdown on online rentals, fearing a potential shortage of accommodation for residents in favour of tourists while also pushing rentals higher.
After the initial restrictions came in, however, city governors noted that many owners were managing to get around the limits and also found themselves having to deal with a raft of appeals.
Four months after the restrictions came in one court allowed through an exception for the owners of a pied-a-terre in the German capital.
City authorities estimate between 20,000 and 30,000 properties or rooms are rented out on a temporary basis.