Will AirBnBs Be Taxed?

Is the Government planning to tax Airbnbs?

So, a couple of weeks ago we talked about how the Government said it was toying with the idea of regulating short-term rentals, such as Airbnb. This was on the back of harsh regulations in New York City.

And you guys raised a lot of concerns. 

So naturally, when we had Minister of Tourism Edmund Bartlett on Taking Stock, I had to ask him about it.

“I don’t regard Airbnb as an industry per se. I regard it as a service area of the tourism supply chain and every destination has to protect its brand and its image and the things that are required to be done for this sometimes at a cost. So somebody has to pay to ensure that the safety, security and seamlessness that you promise in the market to all the visitors who come to the country is preserved,” the Minister said.

But while he was talking, I said the same thing most of you are probably thinking right now… that sounds like they wanna tax Airbnb. 

Essentially, the Minister is saying the space needs regulation to maintain brand Jamaica’s image and ensure people aren’t scammed, have running water, etc. But doing that requires money!

So the ministry has been negotiating with Airbnb to create some sort of arrangement for them to directly contribute to the country’s economy. Right now, Airbnb earns a commission from each booking and landlords pocket the rest. 

Last year, Airbnb made over US$100 million in Jamaica. According to Bartlett, Airbnb stays accounted for nearly 30% of all visitor stays.

However, the economy is only benefitting indirectly from landlords’ success. 

Bartlett wants Airbnb to start contributing directly to Jamaica. It’s not 100% clear if that means only taxes, or taxes and something else. But what it does mean is no extra charge to landlords, which means no extra charge to customers.

In terms of other regulations, Bartlett did not say, but he did emphasise the need for good infrastructure, running water etc. So most likely any regulations would be along those lines.

The Tourism Minister also said he was neutral when it comes to balancing landlords’ right to do short-term rentals versus Jamaicans’ right to shelter and affordable housing. 

It’s clear this debate is not about to end soon. 

And that’s the bottom line.