By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
Regularisation and taxation of vacation home rentals will help to ‘level the playing field’ for traditional hotel operators, according to Bahamas Hotel & Tourism Association (BHTA) president Carlton Russell.
Mr Russell told Tribune Business: “Regularisation efforts, including the application of an appropriate tax regime for these vacation rentals, will help level the playing field for traditional hotel operators in the destination; from boutique hotels located in our family islands where vacation homes are prolific, to the larger properties primarily located in Nassau and Paradise Island.”
He added: “The regularisation of the vacation home rental market will not only help address issues of parity pertaining to cost of product and services, it will also ensure vacation home owners, many of whom live outside this country and benefit from costly destination marketing efforts, contribute to the public purse.”
Tourism Minister Dionisio D’Aguilar said last week that legislation is being drawn up to regulate the vacation home rental sector which will include taxing rental income. The Ministry of Tourism has signed a Memorandum of Understanding (MoU) with Airbnb which requires Airbnb to collect all due taxes and fees associated with Bahamas-based vacation rentals listed on its website, and ensure those landlords are in full compliance with local rules and regulations.
Airbnb is an online marketplace and network which enables homeowners to list/rent short-term stays in their residential properties to tourists, with the cost set by the property owner.
“Bringing vacation homeowners into the regulatory regime will ensure important protocols, such as fire and safety standards currently adhered to by licensed hotel properties, will be enforced, to avoid any issues arising which would damage the reputation of the destination to the detriment of the entire tourism industry,” said Mr Russell.
He noted that the 'sharing" culture is thriving in the travel industry today, with apartment dwellers or vacation home owners using a variety of distribution channels including Airbnb to rent out their vacation homes, unused apartment units or spare bedrooms to travellers seeking alternatives to traditional hotel stays.
Comments
ThisIsOurs 7 years, 4 months ago
Level the playing field??? Against Atlantis?
"it will also ensure vacation home owners, many of whom live outside this country and benefit from costly destination marketing efforts, contribute to the public purse."
Who are we kidding, when they rent these homes, they live like average Bahamians, they catch the bus, they shop at the food store and they take in some sight seeing. I.e. They pay VAT just like us.
Just call it what it is, you're taxing them further
bcitizen 7 years, 4 months ago
Sad thing is the hotels who are pushing for this will see no change in their bookings because the airbnb people are a totally different market/tourist and this will only damage that market and will not help the hotels. And if I have to depend on bozo out to lunch, picking up my child from school, printer broken down, give me 10 dollars, don't know what a fire detector is, I will be there tomorrow (which never comes) government bullsit then f*k it all.
happyfly 7 years, 4 months ago
Go look at any economic report and you will see that there has been a catastrophic division of wealth in the civilized world within the last decade. Gone are the days when middle class people thought it cool to spend $1000 a night to have their family jammed in to two adjoining bedrooms. The traditional hotels are now fighting over 5% of the population that can afford them and lashing out at people that can't. And they want the Government to strangle the competition. That is what "level the playing field means"
Instead of demanding that the government help the hotel industry to be as competitive as airbandb, they are demanding that the government makes aibandb as noncompetitive as the hotel industry
themessenger 7 years, 4 months ago
As prominent attorney Jeanne Thompson points out, will the average vacation home rental person be offered the same concessions under the Hotels Encouragement Act in exchange for their taxes? Will they get duty exemption and other concessions if they want to renovate their property? What about those owners not affiliated with Airbnb? Will the MOT also promote vacation rental properties as they do the hotels? What input will vacation home rental owners have in framing the proposed legislation, will they be consulted? All very pertinent questions raised by Ms. Thompson
bcitizen 7 years, 4 months ago
If your grossing under 100,000 you cant charge VAT. So all your VAT expenses are not recoverable. Since most rental homes are under 100,000 gross they are going to introduce the room tax again basically on those rentals. So if a hotel is grossing under 100,000 (practically impossible I know just trying to figure out the warped logic here) do they then have to collect the room tax in place of charging VAT? Does anyone else find this all slightly insidious?
Sickened 7 years, 4 months ago
This should not apply to those people offering rooms under say $150 - $200 a night as no hotels offer rooms in this range and thus there is no competition. In most instances people in this airbnb price range won't pay more for a hotel room, of say $300 a night, because they really want to come to The Bahamas. Chances are they will look for another destination - on airbnb - that fits their price range.
MonkeeDoo 7 years, 4 months ago
Level the playing field suggests that competition exists between the Airbnb Host and the hotels. This is patently untrue and simply shows that Mr. Russell knows very little, if anything, about the vacation rental business. The suggestion that by taxing the Airbnb business “it will help address issues of parity, pertaining to cost of product and services” is another unfounded statement that further demonstrates that Mr. Russell knows nothing about this business. Since when has the Ministry of Tourism marketed to New Zealand, Australia, Italy, France, U.K., Sweden, Denmark, mid-west USA, West Coast USA ?. While our Governments have been paying millions of dollars in advertising, Airbnb has developed a very successful social media business for very little money. Our Tourism Minister is having the AG’s office bring legislation to tax approximately 1,200, mostly Bahamian, Airbnb Hosts. Just because he thinks they are making money. Talk about a black crab syndrome ! The Minister says …. and ensure those landlords are in full compliance with local rules and regulations. Just when has any arm of government been successful in regulating anything. The huge success of Airbnb is that it is “self-regulating” on both the Host and the Guest. Each publishes a scorecard of their experience, and if something is not right for the Host or the Guest they will be kicked out. The referrals are public, so potential guests can see what has happened with the host they are thinking of renting from, and the host can see what other hosts have experienced with the proposed guest. And no one needs the Ministry of Tourism at all. Sorry !!!! Whenever you impose regulation, you open the door to corruption. We are seeing it every day now. You can’t get a Physical Planning inspection without waiting days and weeks on end, and finally you buy lunch for someone, and you get your certificate. I would like to invite Mr. Russell to go on a tour with me of places that I would like to show him, that don’t have fire alarms and extinguishers and sanitation records, and everything else that is inspected once and never again. He must think that Bahamians are really stupid and will buy anything you tell them. Just look what the regulation and so on did with “Fyre Festival”. That was not an Airbnb deal my friend. Finally, Mr. Russell notes that it is a thriving business. Yes it is, and it thrives without yours, or anybody else’s help. If the Government get involved it will be over for the Bahamas. And no, the Airbnb guest is not going to book at Atlantis or Bahamar or Grand Lucayan or Pink Sands. They are a different kind of tourist and you meddle with them at your peril. They will just go elsewhere. And you will earn nothing and the former hosts will earn nothing. But the people will know who killed the goose.
concernedcitizen 7 years, 4 months ago
On the Island I live very wealthy people are renting homes from other wealthy second home owners that are from the U S or Canada . They are paying from 3000 to 10,000 a week for these luxury homes .I think there is room for some taxation here .
sheeprunner12 7 years, 4 months ago
On most Out Islands it is the same way
DWW 7 years, 4 months ago
ok. and how much is a hotel stay on your island? and exactly how many times do these houses get rented? and exactly how much do these homes spend in property tax every year? and how many people do these homes that rent for very high cost employ? and how much VAT do these homeowners spend in materials or tradesmen to take care of maintenance? and lastly how many restaurants, cleaners, car rentals, boat rentals, grocery stores, boutiques do the patrons of these high end rentals benefit from these visitors? one last point. lets say this $10,000 a week rental is for a 4 bedroom house for 6 nights 7 days. that works out to $416 per room per night, which is exactly what Atlantis charges, but trust me the dough is spread around and not kept within the Atlantis world where a select few make all the profit. think before you make these silly statements.
concernedcitizen 7 years, 4 months ago
I know that , I,m a boat Captain that gets a lot of work from them ,I also do home repairs .However when they pay off a 1/2 million to 2 million investment in 5 to 10 years then make profit as quite a few I know well have told me they do there is from for some tax . Remember we are losing the bed tax . Then many of them buy a boat for the house don,t have a business lic/insurance for boat and claim the guest using it are all their friends or hire a unlicensed capt and charge the house guest extra for us of unlicensed boat .
concernedcitizen 7 years, 4 months ago
As to your think before I make silly comments ,the wealthy foreign second home is the segment that I make my living from and have been involved with for the past 30 years .I am thankful for them and see all the benefits we get from them .I also would not pay to stay in a lot of our boutique hotels , with the high prices ,somewhat lousy service etc .I also see the way the wealthy home owners pull all kind of tricks to cheat custom ,get there houses under valued for property tax here ,, , ask me to inflate the hell out of the build price , fake documents to show the US /Canada , yes I have built for them too, and repairs I do so when they sell it they pay less tax in the US or Canada .PLEASE DON,T TELL ME TO THINK , I started w/ development on PI in 1987 and built the last house for an American in 2004 on a family Island .Now I just Captain boats and do repairs .There is room there for a "bed tax "
DDK 7 years, 4 months ago
It is my understanding that, prior to the implementation of Value Added Tax, second-home owners (non-Bahamian), renting out their dwellings, were required to register (with The Public Treasurey, I believe) and pay a rental tax, in the form of a percentage of the rental income collected from collected from their guests. With the advent of VAT is was decided to remove this tax so as not to over-burden the second-home owner with further taxes as they would be subject to VAT. What Pillage Loot Plunder in all it's wisdom did not factor in was that it is unheard of for a condo or house owner to take in $100,000.00 per annum in rentals to visitors therefore no Value Added Tax would be forthcoming from this venue. The hotel-type tax needs to be reinstated post-haste.
DWW 7 years, 4 months ago
Its more a$$ backwards than that. In return for collecting room tax, the homeowners received a reduced property tax rate. in essence the government ended up receiving less tax at the end of the day. but we have a bunch of idiots running things who have absolutely no clue what they are doing. keep the standard property tax rate and leave VAT out of vacation rentals
sheeprunner12 7 years, 4 months ago
How do the Bahamian tax agencies locate these people when they conduct business with handshakes or phone calls and cash or electronic deposits?????? ......... When these vacation/second homes are rented out, it appears as these arrivals are "friends of the family" ........ who can fix that??????
Honestman 7 years, 4 months ago
This is a really stupid ill advised idea.
DWW 7 years, 4 months ago
This is a classic situation of people making decisions about things which they have absolutely no idea what they are doing or talking about. Hotels get huge concessions. look at Bahamar, built entirely duty free right? a guy builds a house he ends up paying the government 40% of the cost of construction at the end of the day. please tell me i'm wrong. Anyone? if import duties and VAT were paid on Bahamar, that would be around $1,000,000,000 in revenue to the country, and we still ain't seen no benefit after what 5, 6, 7 years? and there are more concessions going into the future. I want to ask the MoT and the government taxmen to actually sit down and have an honest conversation with a vacation home rental owner. I would be happy to put them in touch with several. find out exactly how much they spend in this country every year compared to how much they make. I can personally guarantee you that at least 9 out of 10 owners are operating at a net loss every year. The vast majority of them just love this adorable little country and want to keep coming back here and helping the economy and the people.
If you #&$* with them too much in order to keep your hotel buddys happy they will pack up and leave. then you can kiss a large chunk of GDP goodbye. mark my words.
DWW 7 years, 4 months ago
If a hotel can't keep people coming to their hotel, it ain't because of a little 2 bedroom house rental down the street. they need to look internally and find out why people don't want to stay there. i've stayed in many hotels around the bahamas that leave a lot to be desired.
sheeprunner12 7 years, 4 months ago
I assume you are a foreigner who is a second home owner ........ because you know damn full well that these foreigners import every fricking thing they need to live ........ right down to their old trucks and jeeps from America ....... they spend very little in the economy of my island ........ so try fool someone else
killemwitdakno 7 years, 4 months ago
Levels the playing field because a individual renting out their home on vacation makes the same as a hotel..
Way to steam roll small guy before he even starts.
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