Government Wants VAT From Vacation Rentals

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NASSAU, BAHAMAS – Short-term rentals in the Bahamas are booming, but the Department of Inland Revenue reveals that many property owners are not properly registered. During a weekly press briefing, Controller Shunda Strachan disclosed that over 20,000 short-term vacation properties are operating across the country, but only 20% are registered on the department’s online portal, and only 15% of those who should be paying VAT are properly registered.

SHUNDA STRACHAN – CONTROLLER, DEPARTMENT OF INLAND REVENUE
“Only about 20% of them are really registered on the short-term vacation portal. It should be a hundred percent, but only 20% are registered right now, and only 15% that should be paying VAT are registered for VAT, and that is a concern.”

To address this, the department has enlisted a foreign agency to scan websites and identify non-compliant operators. The crackdown aims to level the playing field and ensure that the government can support the industry with grants, incentives, and accurate data.

SHUNDA STRACHAN – CONTROLLER, DEPARTMENT OF INLAND REVENUE
“For example, if the government is going to give grants to persons in that arena… I’m sure you’re aware that several months ago now, the government gave grants to persons who have short-term properties on the family islands.”

Strachan explained that there are two types of registration: one for general information and another for VAT. Property owners with a turnover of over $100,000 must register for VAT and obtain a business license, while those with lower turnover are not required to register unless they choose to.

SHUNDA STRACHAN – CONTROLLER, DEPARTMENT OF INLAND REVENUE
“If your turnover is over a hundred thousand, then yes, you need to be registered for that. And that would mean that you need a business license. But if your turnover in the whole area where you rent your property is under the $100,000 threshold, then no, we are not looking for you to register for VAT or have a business license unless you want to for some reason or the other.”

However, foreign property owners must register for both a business license and VAT, regardless of their turnover.

SHUNDA STRACHAN – CONTROLLER, DEPARTMENT OF INLAND REVENUE
“If you are not a Bahamian and you own a property that you rent as an Airbnb, then you have to have a business license. You have to be registered for VAT. Even if your turnover is a dollar.”

The Department of Inland Revenue plans to continue surveillance until all short-term rental operators are properly registered and will take enforcement action against those who fail to comply.