Airbnb proposal to register and tax in the DR as posted on DR1

Posted on DR1:

Yesterday at 12:09 PM

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#1

It appears this 2024 is when the Dominican government will start to impose regulations on AirB&B. In FITUR 2024 in Spain, David Collado said that a new agreement already exist and is currently being studied by ASONAHORES to either agree or disagree. The proposed agreement is proposing new taxes to be imposed on AirB&B's in the Dominican Republic, currently are tax free. Most likely the new taxes will be passed to the customer of AirB&B's, so expect an increase of the prices of Dominican AirB&B's.

There are other types of regulations for AirB&B's currently not contemplated but could be in the near future, such as hotels are subjected to a particular standard and are randomly checked to make sure they comply with certain sanitary regulations while AirB&B's are not subject to any of that. Hotels sre the most pressing group asking for new regulations are imposed on AirB&B's citing they create an unfair competition with them.

Currently, there are around 99,000 AirB&B's in the Dominican Republic, already equivalent to more than half of hotel rooms available in the country.

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I doubt the DR will go the extreme route as has been done in NYC where AirB&B's are now banned. They simply ignored putting more regulation and simply put them all out of business. Ouch!

https://www.youtube.com/watch?v=DMHyQl7ottw&t=104s

Today at 12:47 PM

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#9

I have been banging on about this for a long time. If you go onto MITUR's website, they already have a registration form dedicated to registering AirBnB's to get the relevant licence. So this has been on the way for a long time. The key points are:

- As far as I can see, only people who have residency or are Dominicans will be able to operate an AirBnB. The first thing they ask for is your cédula, and if you say you are a foreigner, they ask for a copy of your residency. So all these Americans and Canadians who bought properties here and think they can rent them out will struggle. Looking at how many apartments are being built, and have been built, in Las Terrenas alone, this is definitely going to affect the property market there.

- Paying taxes in this country is not a simple process. The DGII needs everyone to file a monthly return, it only loads on a PC not a Mac, it doesn't work well if you're abroad as the token only works when you are physically in DR, there is an automatic 10% penalty if you're a second late, the forms are all quite complicated. So everyone is going to need an accountant as well as paying the taxes.

- Whilst MITUR doesn't ask for much to register, what they ask for will be things that most AirBnB's don't have. You have to have third party liability insurance for example. You have to prove that any staff employed are registered with TSS (and therefore these also need to be residents or citizens). And you need to show you're registered with DGII, which again you can't do unless you're resident or citizen.

I see the effects are going to be a) the extra taxes will make quite a few properties unviable. b). Quite a lot of people won't qualify to register under the scheme, so they will either try to continue operating illegally (not a great idea as MITUR is very powerful) or they'll close down. c). I think there will be a lot of apartments up for long-term rental and for sale shortly after this comes in. Not a great time to buy right now, as I see this could affect house prices dramatically.