Jamaica’s new Airbnb tax expected to draw close attention across the region

GREAT BAY/KINGSTON--Jamaica’s decision to bring Airbnb-style short-term rentals into its formal tax framework is expected to draw close attention across the Caribbean, particularly in tourism-dependent economies such as St. Maarten where similar calls have been made to ensure that vacation rentals contribute fairly to public revenue.

Jamaica’s House of Representatives approved General Consumption Tax, GCT, on short-term rental accommodations, including Airbnb-style properties, with the measure scheduled to take effect on April 1, 2027. The report noted that Jamaica’s short-term rental sector has grown significantly, from approximately 59,500 guests in 2017 to more than 800,000 in 2024, generating more than J$32 billion for property owners.

For St. Maarten, the issue is not new. Questions have been raised for years about whether Airbnb, VRBO and other short-term rental platforms should collect and remit taxes directly to government.

The move is being viewed as part of a broader regional shift as Caribbean governments examine how to modernize tourism taxation and close gaps between traditional hotels and the rapidly expanding short-term rental market. Jamaica’s measure also comes as GCT on tourism activities is set to rise from 10 percent to 15 percent, also effective April 1, 2027.

In 2021, then Finance Minister of St. Maarten Ardwell Irion told Parliament that government was working toward an arrangement for Airbnb to collect the 5 percent room tax from renters and transfer it quarterly to the government of St. Maarten.

The matter was raised again in 2023, when it was reported that legislative changes would be needed to allow St. Maarten to enter into tax collection agreements with platforms such as Airbnb, Booking.com and Expedia. At the time, it was noted that such a legal clause would be required for the platforms to collect the hotel or room tax on behalf of government.

The St. Maarten Hospitality and Trade Association, SHTA, has also urged government to address gaps in taxation and registration in the short-term rental sector. In a 2023 analysis, SHTA estimated that St. Maarten had at least 1,301 short-term rental units, representing 3,357 rooms, compared to 3,368 hotel units with 4,262 rooms. SHTA said the sector could broaden the taxpayer base through room tax, profit tax or wage tax, while also creating a more level playing field with registered accommodation providers.

Jamaica’s action is therefore likely to renew debate over whether Caribbean countries the country should move beyond discussion and implement a clear framework for short-term rental taxation. Supporters of such a measure have argued that visitors using short-term rentals consume infrastructure, roads, utilities, public safety, waste services and destination marketing benefits in the same way as hotel guests, and should therefore contribute through a structured and enforceable tax system.

The regional significance of Jamaica’s move lies in its timing and scale. Short-term rentals have become a major part of the Caribbean tourism economy, but many islands continue to face challenges in tracking listings, registering operators, collecting taxes and ensuring compliance by foreign and local property owners. Jamaica’s decision could now serve as a reference point for other destinations considering similar action.

In St. Maarten, calls for a similar or improved tax collection model are also tied to the country’s wider fiscal reality. Government continues to face demands for new revenue, better compliance and more sustainable financing of public services. A properly structured short-term rental tax, particularly one collected directly through booking platforms, could help reduce leakage while avoiding an additional burden on residents.

Jamaica has set a timeline for implementation. The Caribbean will be watching how it works, how platforms respond, and whether the measure succeeds in bringing a large and growing tourism segment into the formal revenue system. For St. Maarten, the development adds urgency to a discussion that has remained unresolved for several years.

‍