Tax breaks for hotel projects approved
MPs have approved legislation to offer tax and duty breaks to several hotel redevelopment projects.
Rosewood Bermuda, which recently underwent major renovations, and the St George’s Club, which is expected to get a revamp soon, will both get breaks.
Amendments to the Tourism Investment Act will offer greater relief for future hotel projects and extend support for the Bermudiana Beach Resort.
David Burt, the Premier, who added tourism to his portfolio earlier this month, said an amendment to the Act would extend tax relief for new hotel projects to include the construction of hotels.
He said: “The principal act allows for relief for customs duty for a new hotel for ten years from the hotel’s opening date.
“However, the need for duty relief is significant during the construction phase, which predates the hotel opening.”
Mr Burt added the relief would begin when the relief order was made, rather than when the property opened.
Mr Burt said that the amendment would apply to the Bermudiana Beach Resort in Warwick, which was granted an order in 2018 but had yet to open.
The benefits for hotels that qualify under the Act could include full relief for customs duty and full excemption from hotel occupancy tax for a period of up to ten years.
Hotels could also receive exemptions from the employee share of payroll tax if they have a management training programme for Bermudians and qualify for land tax exemptions for five years — to start six years after the hotel opened — if at least 70 per cent of the staff were Bermudian over the period.
Mr Burt said the amendments would also extend the deadline for restaurants and tourist attractions to apply for relief under the legislation if they invested in renovations and improvements.
Mr Burt added that no restaurants or attractions had applied for the relief because of they were not aware of the changes.
He said: “When the act came into effect, there was a sunset clause of five years for restaurants and attractions.
“Even though much of the period of eligibility for tax relief for restaurants and attractions has passed, the government proposes and amendment that will extend the application of the act for a further five years, for a total of ten years.”
Leah Scott, the deputy Opposition leader, told the Friday sitting of the House of Assembly she supported the legislation, which she said, along with other measures, could spark foreign investment.
She added: “I’m in support of whatever we can do to generate jobs and bring money into this country.”
The House approved orders for Rosewood Bermuda and the St George’s Club to receive relief under the legislation.
Mr Burt said the St George’s Club had been taken over by Hotelco, the developers behind the St Regis hotel project in St George’s, and the company planned to renovate and reopen the property.
He added: “It is the intention of Hotelco to fully renovate the St George’s Club, the interior elements and external finishing of the cottages.
“The main clubhouse and the beach house will undergo a complete renovation and intervention to elevate them to the standard of a four-star accommodation with a spa and gym.”
Mr Burt added that members of the St George’s Club would be able to continue to enjoy their time shares at the renovated club.
He said the schedule for renovations was still under review.
Mr Burt said Rosewood Bermuda, in Tucker’s Town, was bought over by Gencom before the Tourism Investment Amendment Act was laid in Parliament, but the project received support through a hotel concessions order.
The hotel has been redeveloped since then, with improvements to the rooms and the creation of new amenities.
Mr Burt added the new concessions order under the Tourism Investment Act would take into account the previous concessions order to ensure the total period of relief would not exceed the limits set out in the legislation.
Zane DeSilva, the former Minister of Tourism and Transport, said the orders would send a signal to potential investors that Bermuda was open for business and easy to work with.
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