AirB&B Regulation in the DR

[NALs]

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!

 

[NALs]

This was the recent discussion about the new proposed regulations of AirB&B's in the Dominican Republic in Esta Noche Mariasela.

 

[CristoRey]

I hope they put in effect strong regulations on AirB&B.​

Uber needs stronger regulations as well because every company no matter how big or small should be required to adhere to the same standards and regulations without exception.

 

[windeguy]

I Hope They DO Nothing.

 

[drstock]

The main regulation that I think should be put in place is some way to stop places being repeatedly rented to loud and obnoxious groups.

 

[windeguy]

The main regulation that I think should be put in place is some way to stop places being repeatedly rented to loud and obnoxious groups.

That is already in the laws about excessive noise and that has zero to to with how a place is occupied.
They just need a way to enforce them which is hard in many places, no doubt. Get to know your local Fiscal...

I doubt they can come up with laws banning the obnoxious.

 

[CristoRey]

I Hope They DO Nothing.

Interesting.
So you believe in unfair competition in the market place but not when it comes to how much it cost an individual is required to pay in order be in this country e.g. paid for residency vs. paid for overstay?

not try to take this one off-topic BUT...
go figure 😄😅😂

 

[windeguy]

Interesting.
So you believe in unfair competition in the market place but not when it comes to how much it cost an individual is required to pay in order be in this country e.g. paid for residency vs. paid for overstay?

not try to take this one off-topic BUT...
go figure 😄😅😂

I believe in my wife getting more money for her Airbnb business. This taxation would go against that.
It is simple and completely in the topic since this tax is wanted by the hotels.

Residency/Overstay illegally discussion is off topic, but should be based upon the actual laws.

The Airbnb discussion is about new laws, and I don't want them.

I see there are some people that would even ban Airbnb in the DR. And so it goes.

 

[MariaRubia]

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.

 

[MariaRubia]

I believe in my wife getting more money for her Airbnb business. This taxation would go against that.
It is simple and completely in the topic since this tax is wanted by the hotels.

Residency/Overstay illegally discussion is off topic, but should be based upon the actual laws.

The issue is that your wife is probably not completing an IR2 every month and declaring her income to DGII that she makes from the AirBnB business. In which case she is already breaking the law. And in addition, ITBIS should be charged because only long-term rentals are exempt from ITBIS and clearly AirBnB is not a long-term rental. Even the colmados have to pay ITBIS these days and there is absolutely no option for hotels not to pay it. So it's clearly only a matter of time before short-term rental businesses are forced to comply with the law.

 

[windeguy]

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.

The issue is that your wife is probably not completing an IR2 every month and declaring her income to DGII that she makes from the AirBnB business. In which case she is already breaking the law. And in addition, ITBIS should be charged because only long-term rentals are exempt from ITBIS and clearly AirBnB is not a long-term rental. Even the colmados have to pay ITBIS these days and there is absolutely no option for hotels not to pay it. So it's clearly only a matter of time before short-term rental businesses are forced to comply with the law.

Indeed. Very interesting and informative. I am glad it is not my business.

Should the law proceed, will Airbnb be able to continue to do business with people in the DR with listings here who have no cedula, or will they be forced to take their listings down?

 

[MariaRubia]

Indeed. Very interesting and informative. I am glad it is not my business.

Should the law proceed, will Airbnb be able to continue to do business with people in the DR with listings here who have no cedula, or will they be forced to take their listings down?

I think AirBnB will probably insist on having the licence number and clearly you won't be able to get one without a cedula. Even if they don't, MITUR are like dogs with sticks for getting hotels to get a licence. Bear in mind ASONAHORES is run by the Rainieris, and MITUR is run by Collado who is a Vicini in all but name, you have the most powerful people in the country behind this one, trust me they will make it work.

It may be that the government gets AirBnB to collect the taxes on their behalf, I believe this is what happens in some US states.

 

[CristoRey]

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....

Good information.
Thanks for sharing.

 

[Sol09]

I think AirBnB will probably insist on having the licence number and clearly you won't be able to get one without a cedula. Even if they don't, MITUR are like dogs with sticks for getting hotels to get a licence. Bear in mind ASONAHORES is run by the Rainieris, and MITUR is run by Collado who is a Vicini in all but name, you have the most powerful people in the country behind this one, trust me they will make it work.

It may be that the government gets AirBnB to collect the taxes on their behalf, I believe this is what happens in some US states.

The point in the second paragraph seems like the most likely outcome. Airbnb will charge and collect the sales tax via their platform and then remit them to the government.

 

[windeguy]

I think AirBnB will probably insist on having the licence number and clearly you won't be able to get one without a cedula. Even if they don't, MITUR are like dogs with sticks for getting hotels to get a licence. Bear in mind ASONAHORES is run by the Rainieris, and MITUR is run by Collado who is a Vicini in all but name, you have the most powerful people in the country behind this one, trust me they will make it work.

That name always cracks me up: ASx On A xHores

It may be that the government gets AirBnB to collect the taxes on their behalf, I believe this is what happens in some US states.

Obviously that is the game that is afoot. Otherwise Airbnb owners will likely ignore it for the most part and MITUR will have to come after them.
It remains to be seen of a cedula will be needed to run an Airbnb here. I think the odds are pretty good that is going to happen based upon the money talks , BS walks scenario in play.

How does occupancy tax collection and remittance by Airbnb work? - Airbnb Help Center

www.airbnb.com

 

[JD Jones]

I wonder how they handle all of the folks who don't use Abnb but advertise through Facebook and Facebook marketplace?

 

[windeguy]

I wonder how they handle all of the folks who don't use Abnb but advertise through Facebook and Facebook marketplace?

I am sure about that: Poorly.

 

[windeguy]

I wonder how they handle all of the folks who don't use Abnb but advertise through Facebook and Facebook marketplace?

When a client contacts an owner on Airbnb, they don't have direct contact on Airbnb until after they make a reservation.
Some clients try to encode their contact information in the messaging system so they circumvent Airbnb, getting a direct price, etc.
That percentage was already going up,. I can see that circumvention increasing dramatically.

Along with people dropping Airbnb for other methods of marketing their short term rentals.

If any group of people are good at working around things, well we know where we are.

Maybe they will use DR1's AD system.
Wait sorry, that doesn't exist any more and the reach of DR1 would mean almost no business...

 

[CG]

AirBnB has decimated the small hotel industry worldwide and hurt hospitality in general globaly not even to mention the gentrification of entire neighborhoods in global cities. There is no reason that owners of properties that profit from the DR's main income source shouldn't have to follow the same regulations that hotels do, plain & simple.

 

[Kricke87]

I wonder how they handle all of the folks who don't use Abnb but advertise through Facebook and Facebook marketplace?

I don't think that's going to be very popular for the majority being that FB and FB marketplace is just a place to announce, they don't do anything else (or at least that's what I understand) whilst AirBnb is doing everything, make sure no double booking, payments etc..
And being that the majority of people won't be doing that themselves.

In general I like the idea of Airbnb from a business/customer point of view.

But it's quite annoying that this has greatly affected the local rentals.

In just a few years the rents have atleast gone up 3x, and I wouldn't be that surprised that it's because of all the airbnb, even in "barrios".
And instead of constructing apartments/houses for locals many who are constructing or buying properties does so just so that they can put them out as Airbnbs, and if they don't they expect the same rent as if you were renting from Airbnb, which is crazy.
I don't know any locals who could afford to pay $1000-1500 for a 2 bedroom apt.