AirB&B Regulation in the DR

[XQT]

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.

You want laws to cater to your inclinations
And to favour your wife's income margins.

Well at least reading your comments on DR, you do realize to which country you emigrated, became a citizen off
And your realization that in this country laws are very fluid and will never be applied to your liking.

If I was an owner of a condo, I would want short term AirR&B rentals outlawed to protect my property and right to a peaceful enjoyment of my property.

 

[XQT]

Same goes for a detached house complex with common grounds.

 

[JimW]

AB&B's and VRBO's model here in the States is that they collect the taxes during the booking and remit them to the taxing authority/ies. Owners and renters are not involved. (as you can imagine, if they were, Owners would be declaring far less incoming than they received and Renters would be paying tax never knowing if the Owner was just pocketing it.)

 

[MariaRubia]

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If I was an owner of a condo, I would want short term AirR&B rentals outlawed to protect my property and right to a peaceful enjoyment of my property.

Both in DR and in my own country, AirBnB has been banned from the condos where I live and we live in peace. I did rent for a short time in a condo complex in Santo Domingo which was full of AirBnB and it was absolute chaos. Lots of Dominican teenagers renting 3 bedroom apartments and having 8 of them stay there, plus their friends. Nobody who lived there wanted to use the pool.

In Bavaro they are building a massive development, like a small village, and selling the units as AirBnB friendly mainly to foreigners. I wonder how many will be caught out by this.

 

[windeguy]

You want laws to cater to your inclinations
And to favour your wife's income margins.

Precisely correct in this case. Why would I not? But in general I want less government interference and more free market conditions.

Well at least reading your comments on DR, you do realize to which country you emigrated, became a citizen off
And your realization that in this country laws are very fluid and will never be applied to your liking.

Of course, I am completely aware of those things. Going on 21 years here full time.

If I was an owner of a condo, I would want short term AirR&B rentals outlawed to protect my property and right to a peaceful enjoyment of my property.

You can't always get what you want, but if you try sometimes. Let's see what actually happens. There is big money behind wanting these Airbnb regulations.

Seems like you would want laws to cater to your conditions, if you had a condo, eh? A cake and eat it too approach, no?

 

[windeguy]

AB&B's and VRBO's model here in the States is that they collect the taxes during the booking and remit them to the taxing authority/ies. Owners and renters are not involved. (as you can imagine, if they were, Owners would be declaring far less incoming than they received and Renters would be paying tax never knowing if the Owner was just pocketing it.)

I would expect the same here and already posted the Link on how Airbnb does it there.

 

[windeguy]

Both in DR and in my own country, AirBnB has been banned from the condos where I live and we live in peace. I did rent for a short time in a condo complex in Santo Domingo which was full of AirBnB and it was absolute chaos. Lots of Dominican teenagers renting 3 bedroom apartments and having 8 of them stay there, plus their friends. Nobody who lived there wanted to use the pool.

In Bavaro they are building a massive development, like a small village, and selling the units as AirBnB friendly mainly to foreigners. I wonder how many will be caught out by this.

It will suck to be them, no doubt. Those without cedulas will be forming companies to work around the lack of a cedula, dealing with monthly tax filings, etc.
Or just bailing out and re-selling before they ever had a renter.

 

[windeguy]

Where I am, there are so many airbnbs and so few tourists, that the law will have minimal impact directly other than to put some resales on the markets that snowbirds or full time expats might buy.

 

[chicagoan14]

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.

I agree and they're focusing on amenities over quality materials and size because in some areas they're mostly for rentals. A friend of mine lives in Piantini. He's 1 of 3 people who actually live in the building. The apartment is a shoebox with low quality materials. Amazing pool and bar though which is what attracts the guests. The other side of it is the nightmare of having an endless rotation of people you don't know in your space.

 

[chicagoan14]

Both in DR and in my own country, AirBnB has been banned from the condos where I live and we live in peace. I did rent for a short time in a condo complex in Santo Domingo which was full of AirBnB and it was absolute chaos. Lots of Dominican teenagers renting 3 bedroom apartments and having 8 of them stay there, plus their friends. Nobody who lived there wanted to use the pool.

In Bavaro they are building a massive development, like a small village, and selling the units as AirBnB friendly mainly to foreigners. I wonder how many will be caught out by this.

This is a good point and i think it will cause some problems. you have investors who have never even visited the properties they own that they're renting out. There's some companies who facilitate purchasing during construction and manage the properties on airbnb.

 

[drstock]

I wonder if the new regulations will extend to the hotel booking sites like Booking.com, Expedia etc. which are now getting into the property rental market in a big way. I recently went onto Booking.com looking for a hotel and found it was much more economical to rent an apartment for a family rather than hotel rooms.

 

[windeguy]

I wonder if the new regulations will extend to the hotel booking sites like Booking.com, Expedia etc. which are now getting into the property rental market in a big way. I recently went onto Booking.com looking for a hotel and found it was much more economical to rent an apartment for a family rather than hotel rooms.

A good point. I can also see another site popping up to try and compete with Airbnb in locales where restrictions are placed.
There are people that will always come up with work arounds and we know how good Dominicans are for that.

Governments have reacted where gentrification has taken place because of Airbnb and similar rentals.

This reaction in the DR is primarily from rich hotel owners. Let's see how it really goes.
Similar situation to what UBER and the taxi mafia got into.

 

[CristoRey]

Seems like you would want laws to cater to your conditions, if you had a condo, eh? A cake and eat it too approach, no?

Talk about the pot calling the kettle black.
SMH...

 

[Manuel01]

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 😄😅😂

Actually full taxation of Airbnb would be unfair ! 95% of all resorts are managed abroad. If you make a reservation online or via a Travel Agency, your Credit Card get billed from abroad (you are welcome to check your CC Status with your Bank). This "administrations" are usually located in so called "Tax Heavens". The Resort than bills the "Administration" for every client they host the lowest price possible to avoid paying to much taxes in the DR. You can be sure that all this big companies are way better in avoiding taxes than the smartest Airbnb host is.

 

[NanSanPedro]

Actually full taxation of Airbnb would be unfair ! 95% of all resorts are managed abroad. If you make a reservation online or via a Travel Agency, your Credit Card get billed from abroad (you are welcome to check your CC Status with your Bank). This "administrations" are usually located in so called "Tax Heavens". The Resort than bills the "Administration" for every client they host the lowest price possible to avoid paying to much taxes in the DR. You can be sure that all this big companies are way better in avoiding taxes than the smartest Airbnb host is.

Not understanding your point. Don't all guests have to pay the ITBIS? Or are you talking business P&L (ie, income tax), and how does being a foreigner help one avoid that?

 

[Manuel01]

Not understanding your point. Don't all guests have to pay the ITBIS? Or are you talking business P&L (ie, income tax), and how does being a foreigner help one avoid that?

you are not billed in the dr if you make your reservation online. The Resort bills the Administration with itbis but at a much lower amount. For example; you book a room for 300$ / Night. The resort bills the administration to host you arround 100$. Itbis is paid only for the 100$. Also this allows the resort to "adjust" the "Hosting Costs" so they never will make any taxable profit. This is no "Dominican Practice". All the Resorts are doing the same all over the world (exept cuba).
Only if you make a reservation by phone and than pay at the resort in cash or with CC, than the entire amount will be taxed with ITBIS and you can receive a Invoice with Comprobante Fiscal.

 

[NALs]

AB&B's and VRBO's model here in the States is that they collect the taxes during the booking and remit them to the taxing authority/ies. Owners and renters are not involved. (as you can imagine, if they were, Owners would be declaring far less incoming than they received and Renters would be paying tax never knowing if the Owner was just pocketing it.)

That is only possible in an all cash business, but I think payments on airbnb are done electronically with cash never taking place between renters and owners. That means it leaves a record. Everything, money related or not, that is done electronically/via the internet leaves a record presumably forever. Once a record exist, it isn't very smart to pretend the IRS/DGII can't have access to them.

 

[MariaRubia]

A good point. I can also see another site popping up to try and compete with Airbnb in locales where restrictions are placed.
There are people that will always come up with work arounds and we know how good Dominicans are for that.

Governments have reacted where gentrification has taken place because of Airbnb and similar rentals.

This reaction in the DR is primarily from rich hotel owners. Let's see how it really goes.
Similar situation to what UBER and the taxi mafia got into.

Yes, as I understand it, it's the apartments themselves that will be regulated. If you are renting an apartment via any website (or even informally) for short-term vacation rental you need to be licensed. And I imagine that in just the same way that MITUR finds hotels that aren't licensed within about a picosecond, they will have plenty of resource dedicated to making sure this happens. As I said previously this is a thorn in the side of the Rainieris and the Vicinis and those families are pretty good at getting things done.

 

[MariaRubia]

you are not billed in the dr if you make your reservation online. The Resort bills the Administration with itbis but at a much lower amount. For example; you book a room for 300$ / Night. The resort bills the administration to host you arround 100$. Itbis is paid only for the 100$. Also this allows the resort to "adjust" the "Hosting Costs" so they never will make any taxable profit. This is no "Dominican Practice". All the Resorts are doing the same all over the world (exept cuba).
Only if you make a reservation by phone and than pay at the resort in cash or with CC, than the entire amount will be taxed with ITBIS and you can receive a Invoice with Comprobante Fiscal.

Yes this is how it works. The transaction is billed in a third country with a friendlier tax regime, that company takes in all the money and only pays out a small percentage to the resort, and this is deemed its income. So resorts never declare a profit in DR.

 

[MariaRubia]

This reaction in the DR is primarily from rich hotel owners. Let's see how it really goes.
Similar situation to what UBER and the taxi mafia got into.

No it's not similar to Uber. Uber in DR is a franchise owned by Venezuelans. In DR the president himself is very heavily invested in hotels, as are all the most powerful families in one way or another. The only time that the government got involved to stop the war between Uber and the taxis was when it started to affect tourism because people were posting videos.

Also, notice that even the Chinese ferreterias now have to provide comprobantes fiscal. Even a little colmado is paying ITBIS. I am absolutely amazed that it has taken up until now for the government to start taxing vacation rentals, but it is definitely definitely going to happen. And I have to say that of all the government departments, MITUR is in my opinion the slickest, certainly when it comes to licensing.