Tuesday, Jul 23, 2019
HomeBusinessGibson: Some family island homes being run like ‘unregistered, all-inclusive resorts’

Gibson: Some family island homes being run like ‘unregistered, all-inclusive resorts’

Member of Parliament for Long Island Adrian Gibson is calling on the government to investigate instances of second homeowners using their properties to run an “unregistered, all-inclusive resort”.

Gibson, who made the call for the investigation while delivering his 2019/2020 budget contribution last week, explained that these kinds of arrangements set up by second homeowners represent an unfair advantage over locals who pay taxes on their vacation rentals and who rent vehicles for use by visitors to the island.

“In recent years, we have seen a proliferation of second homeowners who have been purchasing property at very low rates; utilizing the Family Islands Development Encouragement Act for duty-free concessions and constructing homes; and renting these homes whilst competing head-to-head with locals and hotels,” said Gibson.

“In Long Island, I’ve been reliably informed of second homeowners now renting vehicles with their houses. I call upon the Road Traffic Department to investigate this… I will be providing names to the controller.

“Rental car operators must pay business license, franchise and vehicular licensing fees…by contrast, these persons don’t. I’m also advised that these persons rent boats with a GPS apparatus with the coordinates for the flats and fishing grounds for them to simply follow, thereby cutting out local fishing guides. What’s more, the homes are now being rented full of groceries and I received several recent complaints about an owner using his garage as a shop: selling alcohol and groceries.

“This is egregious, nothing short of unconscionable, unacceptable. When and how would the local community benefit?”

Gibson contended that second homeowners have made millions in untaxed earnings over the last few years.

“I spoke to Matt Brear, general manager at Cape Santa Maria, yesterday. I’ve known Matt for some time and he lamented the fact that these persons can compete with [Cape Santa Maria] all whilst avoiding having to pay employee salaries, business license [fees] based on turnover, hotel license fees, NIB and other registration fees,” Gibson said.

“The result of this, I am advised, will perhaps be traditional resorts having to downsize.”

While the government has vowed to ensure that second homeowners who use their properties for short-term rentals pay value-added tax (VAT) on those transactions, Gibson said he thinks this will not go far enough.

“Whilst I note our efforts to apply VAT, what do we do when such an owner now decides not to use the Home Away website, Airbnb, etc.,” he said.

“They are laughing all the way to their foreign bank accounts.

“Whilst the decision to charge VAT at the point of business is better than the current state, what prohibits these homeowners from collecting monies at the residences (some have multiple homes and spend substantial time in The Bahamas) or receiving direct deposits to their bank accounts or receiving cash transactions?”

Gibson said there needs to be a major “crackdown” in the Family Islands in regards to these kinds of properties.

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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