A prominent realtor is calling for Bahamian vacation rental owners to receive incentives similar to those under the Hotels Encouragement Act to prevent the market from being dominated by foreigners.

Mario Carey, president and chief executive of Better Homes & Gardens Real Estate MCR Bahamas, argued that doing so would place Bahamian entrepreneurs on a competitive tax ‘level playing field’ alongside their foreign counterparts when it comes to investing in - and improving - their properties.

He pointed out that, under the current system, foreign owners of high-end condominiums in communities such as Albany and GoldWynn can bring in equipment, furnishings and fixtures duty and tax-free via the Hotels Encouragement Act while Bahamian vacation rental owners have to pay the full VAT and Customs tariffs.

And Mr Carey also called for the creation of a Bahamian vacation rental owners association to guarantee they have a “seat at the table” in government decisions and ensure Bahamians running smaller hospitality enterprises gain the benefit of tax breaks, incentives and concessions extended to foreign rivals. 

“Short-term rentals like Airbnb or VRBO are the fastest growing sector of the tourism economy, and a sector that Bahamians of relatively modest means can participate in,” said Mr Carey. “Yet, while there are hundreds in the marketplace, they have no voice. They are just operating out there in the wilderness.

“When new policies or regulations are being discussed, no one is consulting the operators who are going to be affected. I am proposing an organisation that has a dual purpose – to speak for the short-term vacation rental market, to extend benefits of the Hotels Encouragement Act through that association, and to protect Bahamians participating in the market, particularly in the Family Islands.”

The Hotels Encouragement Act was designed to encourage construction and renovation in the Bahamian resort industry, and does so by providing concessions and exemptions to hotel developers. But it allows condo owners in Albany, Goldwynn and other high-end developments to bring in all their furnishings, decor and appliances duty-free.

This is despite the fact that these owners often rent their properties out short-term. In some cases, the condo association structure requires owners to make their property available for rent for nine months of the year.

“Most of those owners are extremely wealthy foreigners, and they are enjoying the benefits because Albany and certain other developments are registered under the Hotels Encouragement Act. Meantime, a Bahamian who wants to renovate a home or upgrade a space to create a short-term rental is paying full duty and VAT on everything they purchase. It is all because the small operator does not have a voice,” said Mr Carey.

“Given the decisions government is making related to registration, licensing and real property tax, Bahamians in the short-term rental market, especially in the Family Islands, need a seat at the table now more than ever.”

Mr Carey’s support for Bahamian-owned properties in the Family Islands comes in the wake of a letter sent out recently by the Government to Airbnb owners to encourage them to register their properties with the Department of Inland Revenue.

Reports have suggested the letter was intended only to apply to homes and properties owned by foreigners. However, concerns were raised as the letter itself made no distinction between Bahamian and foreign-owned vacation rental properties.

Mr Carey said he worries that the short-term vacation rental market is becoming an expatriate’s dream set-up and Bahamians are missing out on opportunities. “Expat interest in the short-term vacation rental market is especially evident in places like Eleuthera, where one management company based in the US, for instance, controls dozens of rentals,” he added. 

“As we make The Bahamas more attractive to visitors who might go elsewhere or to Bahamians looking for a Family Island experience, we need to ensure that Bahamians participate and benefit.” Mr Carey said banks have an important role to play, making attractive lending facilities available for the Bahamian owner of short-term rental property.

The Bahamas currently has 2,600 properties on Airbnb alone, with yields for profits ranging from 6-10 percent, higher than regional rivals such as Miami or Costa Rica. Last year, the Department of Inland Revenue said there were an estimated 38,000 vacation rental units in the Family Islands, but only 502 or less than 1.3 percent were registered as of December 2024. Of those, 55 percent were foreign-owned and registered as vacant land.