Minister: No Intention Of Bringing Heavy Taxation

March 10, 2017 | 24 Comments

Tourism, Transport and Municipalities Minister Michael Fahy believes “there will be significant growth in the vacation rentals and home stay market not just through AirBnB, but also through other organisations that promote tourism alternatives to hotels,” adding that “the Government has no intention of bringing heavy taxation to the Bermudian home-owner.”

He also said he is “not alarmed by the concerns raised by the Shadow Tourism Minister today, because there is no plan to make AirBnB a mandatory option for home owners.”

The Minister also noted, “The Government has no intention of bringing heavy taxation to the Bermudian home-owner and in fact any fee that may be implemented would be borne by the end user – not the home owner.”

The Minister facilitated the signing of a Memorandum of Understanding between AirBnB and the Bermuda Tourism Authority this week which they said “provides a framework for future discussions as Government and the BTA seek ways to expand the industry locally.”

The Minister said, “These efforts will grow as the market develops. We will help facilitate discussions with other entities, as well. This is why we believe many more Bermudian families will take advantage of this industry. This is about economic empowerment – encouraging more Bermudians into the industry.

“Will there be some form of tourism fee eventually, to further enhance BTA marketing efforts? I think so and it is envisaged this would be collected by the home stay/vacation rental facilitator directly from the visitor – and not the home owner – for onward transmission to the BTA.

“This is just one of the substantive reasons for the talks with these organisations, because after all, it is about putting more heads in beds.

“The Government believes that consultation will create an awareness of how regulation of the sector might change. However regulations, if any, will be absolutely minimal.

“We are exploring the viability of Government issuing exemptions to rent controlled properties to allow all types of properties to enter this market. The agreement with AirBnB was significant because of the growth trajectory the company forsees.”

Minister Fahy added, “The industry internationally is forecast to grow from $100 billion by an additional $70 billion by the year 2019. AirBnB is already in 34,000 cities in 191 countries and it is continuing to grow and innovate.

“As an online provider, they are expanding into other tourism products, creating a one-stop shop for leisure travel and seeking a billion users by 2025. We think it is only fair that Bermudians get a slice of that expanding pie.”

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Comments (24)

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  1. wahoo says:

    Thanks for clearing that up.

    • WHAT? says:

      “Will there be some form of tourism fee eventually, to further enhance BTA marketing efforts? I think so and it is envisaged this would be collected by the home stay/vacation rental facilitator directly from the visitor – and not the home owner – for onward transmission to the BTA. :(

      You do understand that people rent from AirBnb because it’s cheaper than the average hotel? So now the visitor at some point will have to pay additional fees, which will cause the overall price to go up. This extra fee will be split between AirBnb and the BTA making money off Bermudians.

  2. sage says:

    Keyword “heavy”.

  3. At this point and from past promises, cant believe these people.

    • Kidder says:

      Please provide an example.

      • answer says:

        Example #1 Campaign surrogates. The former UBP/OBA leader was one and so was political figure Sir John Swan.

      • Immigration policy, $350,000 campaign fiasco, JetGate, StoneGate on North Shore, changed GP licence plates for security(that was a lie), legislated a law to disregard contracts (Water Front), made accusation about fraud (bogus cheques to Dr. Brown and Burgess) Pattingale setteled without persuing, Secret tapes, shady airport deal, spending Millions for witch hunt for 6 years on Dr.Brown (if he’s guilty then justice served, if not counter sue), along with anti-Bermudian policies, is all I can think of for now.

      • The Original Truth™ says:

        Promise to debate the removal of term limits before doing so.

        Promise for a casino referendum.

        Promise for a sex offender registry.

        Promise to decrease unemployment and underemployment rates.

        Promise not to change immigration laws to ones that provide pathways for temporary residence to become citizens.

        Promise for a change.

    • Skytrain says:

      OJ, the sky is falling!

    • Ex ex pat says:

      It is certainly a shame that you have a complete inability to say anything of any use.

  4. Cranberry says:

    Raising prices – has never assisted in the growth of any market… BTA gave out bonuses last year so there is obviously not a shortage of money…

    • The Original Truth™ says:

      Especially to the end user who feels the product in that location is already overpriced compared to it’s alternatives.

      Wonder if those who don’t book a stay at rental through Airbnb will still have to pay the tax for it’s cost.

  5. marcusbmco says:

    I’m not surprised at this article. When I heard the first announcement I smelled trouble. OBA are simply not to be trusted and are simply trying to get you and me to pay for their toys and their debt. At the end of the day, our roads are crumbling as is our financial future. Have been for some time now.

    • 32n64w says:

      The debt and recurring interest obligations are entirely attributable to the PLP’s fiscal ineptitude and mismanagement. The OBA have been steadily reducing the deficit each year to prudently clean up the mess their predecessor created.

      • San George says:

        Debt has doubled under the OBA because they don’t have the fortitude to reduce the size of the civil service. PLP expanded the size of the civil service to buy votes. Politricks!

  6. seas the day says:

    Could you please touch on an estimated future revinue obtained through that of a tax on medical marijuana…And the visitors that would come knowing…Knowing we were forward thinking and aduult enough to realise any and all benificiial items we could put in place by embracing this newly accepted stream of revinue?

    • sage says:

      Why should cannabis, something many among us have been unjustly harassed, beaten, robbed and imprisoned etc. for, now provide income and boost the coffers of the govt. who wrongfully persecuted its own people for decades over it and continue to do so up to today. Restitution for crimes against humanity, an apology and full pardons from them would be more fitting. Money saved from the futile fight against herb, if discontinued, would be huge. The failed war on some drugs and its bloated ineffective staff and infrastructure has helped to bankrupt nations and put us all in deep debt.

  7. Jonathan Land Evans says:

    I imagine that there may well, additionally, be Payroll Tax implications for people renting out their rooms or properties to a stream of short-stay visitors, if the Office of the Tax Commissioner were to regard that as amounting to a business/self-employment. It would be helpful if the Tax Commissioner would issue a guidance statement of some kind on this, so that people will know what they may be getting themselves into in that regard.

  8. Realist says:

    The regulations can ensure quality, safety and better exposure for guests and rental units. People are using this service and it gives good value for money especially for reviews. Revenue generated could cover cost of marketing properties.

  9. JUNK YARD DOG says:

    “Heavy taxation”. That’s rubbish,they said that when they originally introduced land tax ,they say one thing and do another.

    Why don’t they tax the air we breathe !

    Taxing the people will not satisfy the national debt,I mean the Governments debt, the interest on the debt is absolutely ridiculous. Do they borrow money to pay the interest ?

    Does the rate of interest go down as the debt increased ?

    A prudent person will know how he will pay for debt before before negotiating a loan.

    New airport old runway ?

    • bdaboy says:

      “I mean the Governments debt, the interest on the debt is absolutely ridiculous.”

      Thank you plp, for our massive debt.

  10. Longtail says:

    I have stayed in 2 Airbnb properties in Europe recently – one was much further from the city centre than advertised, the other was a complete disaster with a second bedroom with a completely unusable broken bed…….
    While Airbnb may be marketed as a low cost solution for travellers there needs to be some form of monitoring to ensure that properties are of an acceptable standard: Airbnb vets reviews made on their website and from my experience they tone down and limit unfavourable reviews. If Bermuda is going to go this route there MUST be an independent process to maintain acceptable standards.

  11. JUNK YARD DOG says:

    We paid thousands on import duty on our homes and everything in them, next came land tax that is ” DOUBLE DIP”.

    I am not asking, I am telling you all on the hill to make some sacrifices, did you not understand the concept of the SAGE REPORT!

    The Cure
    Privatization, will reduce the burden.
    Competition, will reduce the burden
    Introduce price control on essential items, will reduce the burden.
    Privatize the prisons.
    Pass tougher laws for crime.

    Mr. Minister, how long do you think “we the people” can go on on living this way, as the cost of living for the working man is spiraling out of control.

    Review the budget every 6 months. summer and winter.

    Annual budgets have not worked.

    $24, mill for golf.

  12. Janice says:

    I broke a bed in an airb&b

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