Thursday, August 10, 2017
By NATARIO McKENZIE
Tribune Business Reporter
Legislation is being drawn up to regulate the vacation home rental sector which will include taxing rental income, Tourism Minister Dionisio D'Aguilar revealed yesterday.
Speaking at a press conference for the signing of a Memorandum of Understanding (MOU) between the Ministry of Tourism and Airbnb, Mr D'Aguilar said there is "ample evidence" that the vacation home rental market is one which is poised for growth.
"We see evidence of this in the increase in the number of online booking agents, such as Airbnb and a growing preference among leisure travellers away from traditional hotels toward second home rentals," said MR D'Aguilar.
"The Ministry of Tourism recognises the contribution of vacation home rentals to our economy, but notes, with concern, that, generally, this sector is unregulated and operates without taxation."
Mr D'Aguilar said that while the rate of taxation has not yet been determined the amount of tax levied will level the playing field in the industry. He noted that it could be in the range of the 7.5 per cent VAT.
"Ideally it would have been the 7.5 per cent VAT but that doesn't work for Airbnb. The reason being is there are certain exemptions and they like taxes that are clean and easy to collect. Since VAT has a $100,000 ceiling it becomes difficult for them to ascertain whether that person had reached that threshold," said Mr D'Aguilar.
"The great take away from this is not the tax but that this is a way for Bahamians who are unable to tap into the tourism sector in the formal sense can begin to tap into the sector in the informal sense."
Mr D'Aguilar said the new legislation being crafted to regulate the sector will clarify many of the 'murky issues" which now plague it.
"The regulation will define the parameters of vacation home rentals. It will set the standards and best practices to facilitate the sector in preserving the reputation of our destination brand. The new legislation will put in place a modern regulatory framework within which vacation home rentals can operate as an integral part of our tourism sector," he added.
According to Sean Sullivan, Airbnb's policy lead for Central America and the Caribbean, there are 1,900 active listings from The Bahamas on Airbnb's platform and 1,200 active hosts. "Our average host makes about $6,000 a year through Airbnb. The majority of people who use Airbnb to come to The Bahamas come from the United States, Europe and parts of Latin America. This is an important market for Airbnb. I think that The Bahamas has a lot to offer."
Mr D'Aguilar noted that not all vacation rental properties in The Bahamas are listed on Airbnb's platform which is why over the next few months, the Ministry of Tourism is asking all proprietors and operators of owner occupied rental homes to register with its Hotel Licensing Department. The Ministry launched a registration drive in 2016 and in the past few months saw an increase in the number of registrants according to Mr D'Aguilar.