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HomeBusinessMinistry of Finance looking at taxation method for vacation home rentals

Ministry of Finance looking at taxation method for vacation home rentals

The Ministry of Finance (MOF) could implement a method of taxation for vacation home rentals utilizing online services such as Airbnb, in the 2019/2020 budget cycle, Minster of Tourism and Aviation (MOTA) Dionisio D’Aguilar said yesterday.

Speaking to the media following a MOTA press conference, D’Aguilar said the MOF is working on how to define a tax that captures private home owners using their dwellings to transact commercial services.

According to D’Aguilar, the move to tax Bahamians who have properties listed on Airbnb will require changes to laws and has proven to be a complex issue.

“If you have a room or an apartment on your property, because you’re conducting a business from your property, does that change the designation of your property from residential to commercial,” said D’Aguilar.

He added that the Department of Inland Revenue has taken the position that Bahamians operating vacation home rentals are importing a service, and therefore are subject to paying 12 percent value-added tax (VAT) on that service.

“When you rent your house, you’re not importing a good, you’re importing a service,” D’Aguilar said. “You should charge 12 percent VAT and that should be remitted to government.”

The data website AirDNA, which provides statistics on Airbnb listings across the world, showed that New Providence had 1,045 active listings, with an occupancy rate of about 50 percent. A press release from Airbnb said listings throughout the islands of The Bahamas have hit about 2,900.

According to the press release, “the home sharing community in The Bahamas” saw a 59,000 guest flow through, averaging a trip length of five days.

“These travelers were welcomed by 1,700 hosts who opened their doors to offer locals and foreigners alike a diverse, inclusive and sustainable travel experience in urban destinations such as Nassau, but also on the Family Islands and areas that typically benefit less from tourist visits,” the release notes.

“Home sharing democratizes the tourism industry, providing the opportunity for thousands of Bahamians to share their country with guests from all over the world, and benefit directly from it.

“Bahamian hosts are a diverse group; sixty-one percent of hosts are female. The average host age is 50, with sixty-eight percent of hosts in The Bahamas between the ages of 30 and 59.”

Chester Robards

Senior Business Reporter at The Nassau Guardian
Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian.
Education: Florida International University, BS in Journalism
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