The Hotels (Amendment) Act 2009 introduced new licensing and taxation requirements for owner-occupied rental homes in the Bahamas. An 'owner-occupied rental home' is defined as:

"property occupied by a person who being the owner in fee simple or a mortgagor in possession occupies and resides in such property exclusively as a dwelling house on a permanent or seasonal basis".

Since July 1 2010 all homeowners who are renting one or more bedrooms in an owner-occupied home are required to apply to the Hotel Licensing Authority (a division of the Ministry of Tourism) for a hotel licence, which must be renewed annually. In addition, a rental tax at the rate of 10% of the rental income is payable on all owner-occupied homes which are rented.

The annual fee for a hotel licence is $3 per bedroom. However, hotel operators and owner-occupied rental homes in New Providence/Paradise Island are exempt from payment of this annual fee where they have fewer than 10 bedrooms, and in Grand Bahama and the Family Islands where they have fewer than 25 bedrooms.

Renting out an owner-occupied home without a hotel licence is subject to a fine of up to $500 per day.

For further information on this topic please contact Raquel Wilson at Lennox Paton by telephone (+44 (0)207 743 6490), fax (+44 (0)207 743 6490) or email ([email protected]).