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Todd: balance needed between vacation rentals and housing

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Stephen Todd, the chief executive of the Bermuda Hotel Association (File photograph)

The head of the Bermuda Hotel Association has called for a healthy balance to be struck between providing an adequate vacation rental itinerary and affordable housing.

Stephen Todd, the chief executive of the BHA, was speaking in response to government plans to shake up tenancy laws to encourage landlords to rent their properties to Bermudians rather than tourists.

Mr Todd said: “There would need to be a balance that recognises the need for accommodations for local residents but also bearing in mind that the entrepreneurial spirit is alive and well.

“How that is achieved at the end of the day will need to be given further consideration. We believe that if due consideration can be given to how it evolves over time, hopefully that balance can be struck for local residents and entrepreneurs in that area of tourism.”

Jason Hayward, the Minister of Economy and Labour (File photograph by Akil Simmons)

Jason Hayward, the Minister of Economy and Labour, said this week that more needed to be done to make it “advantageous” for landlords to provide affordable housing to residents rather than holiday homes to visitors

He said that there was a shortage of both categories of housing but added that the vacation rental sector needed to be regulated to avoid diminishing the stock of affordable housing.

While he highlighted that some jurisdictions had passed legislation to restrict the number of vacation homes on the market, he drew short of saying the same was being considered for Bermuda.

However, he said: “I would prefer a Bermudian family residing in a property rather than a tourist staying there on a temporary basis.”

The Bermuda Rental Association of Vacation-Home Owners Association, which represents the vacation rental industry, has opposed a tax that was imposed on the industry last September.

It said some of its 300 members were already taking their properties off the rental market following implementation of the Vacation Rental (Application and Registration) Fees Act 2023.

The legislation sets an annual fee to rental property owners based on the property’s annual rental value.

Properties with an annual value below $22,800 will pay $1,500 a year, those valued between $22,801 to $90,000 will pay $2,000, and a $2,500 yearly fee for rental value at $90,001 and above.

This is on top of land tax and a Bermuda Tourism Authority fee.

The industry also said that it was unfair that hotels were being given concessions that the rentals were not afforded.

Mr Todd said: “Recognising the hotels are required to be licensed under Hotel Licensing Act, our members have to pay fees. It has to be factored into the equation that our members pay their fair share. They pay 7.25 per cent occupancy tax, we also collect the 4.5 per cent BTA tax, which is charged to our guests.

“We pay all the other fees associated with health certificates, liquor licensing, in land tax and payroll tax. All those are factored in as part of doing business. We sympathise with the vacation rentals but we have been paying those for some time.”

Mr Todd said he had suggested that the vacation rental industry join the BHA.

“There is strength in numbers. We suggested they could join as an allied member,” he said.

“We work on the best interests of our members so that is an opportunity.”

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Published April 25, 2024 at 7:52 am (Updated April 25, 2024 at 9:06 am)

Todd: balance needed between vacation rentals and housing

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