A noteworthy story from Aruba was published in Thursday’s paper. It seems the rise in vacation rentals there is causing a shortage of affordable housing.
That situation has existed in St. Maarten for many years, due mostly to widespread foreign condo ownership. Some of these are also rented out, often without paying local taxes.
The advent of home-sharing platforms such as Airbnb has obviously worsened the problem. Until now much focus has understandably been on the fiscal aspect, but the impact on available living accommodations for the population might indeed deserve some attention as well.
A study will now be carried out in Aruba. It is to form the basis for an “inclusive policy” to tackle the issue, but in what way was not explained.
Getting some income from short-term vacation rentals is addressed in St. Maarten’s “country package” of restructuring measures and particularly intended tax reforms recently discussed in Parliament by Finance Minister Ardwell. Efforts to reach revenue-sharing agreements with Airbnb and other international providers have apparently not materialised.
A tax for non-resident property owners was discussed earlier, while the Committee for Financial Supervision CFT said last week that the government in Philipsburg is “already working on a reform of the accommodation tax on the rental of homes to tourists.”
It should be interesting to monitor these developments further, especially as there is considerable concern in the sizeable real estate sector. Industry professionals warn that any significant periodic tax would have severely negative consequences for the market and suggest increasing the one-time property transfer fee instead.
Few will disagree that something must be done so whoever makes money in this country contributes their fair share. Exactly how to best go about it is another matter.
