ITBIS for Renting Our House to Tourists

[Catsegler]

Hello,

I am new in the forum and did not really get an answer. We are tax resident in Germany and did buy our house in Las Terrenas in Oktober 21. Leaving DR now, we offer for a 100$ daily rate it via platforms like airbnb, booking.com and think about local agents , too.
"Viviendas" are excluded from Itbis, but why hotels are charged and a private owned holiday villa not? In Germany you are charged with German VAT of 7% over a limit of 18.000$ rental income a year. How do all the foreigners in the DR practice that? We never paid any Itbis renting a vacation house by a private owner last 10 years in the DR.
How is this regulated. What does happen with the earnings of the rental activity? Do I have to make an income tax declaration like a DR resident. All this questions should not be new, but I didn't find an answer until now. Thanks for helping

 

[MariaRubia]

It's an anomaly. There is no ITBIS charged for renting out a property in DR. However the rise and rise of Airbnb has led to stiff competition for hotels and the hotel sector has frequently complained that it's at a disadvantage. The government has proposed an online sales tax which it would apply to Airbnb and to Amazon but this was never voted through.

I do think it's quite likely that there will be regulation regarding Airbnb which will require owners to register their properties and pay tax on rental income. This is what happens in most major cities and the amount of tax revenue the DGII is missing by not enforcing this is huge. Additionally you only have to glimpse at this government to recognise how important the hotel sector is and how powerful a role this plays in decision making. So I expect it will happen at some point.

At the moment the lack of regulation means that Airbnbs are not inspected. So they don't have to comply with fire regulations or meet hygiene standards unlike hotels. Or indeed have any form of insurance. At some point a tourist is going to die in an Airbnb and a big fuss will be made and at that point I imagine regulation will be brought in. So enjoy it while it lasts.

 

[RDKNIGHT]

It's an anomaly. There is no ITBIS charged for renting out a property in DR. However the rise and rise of Airbnb has led to stiff competition for hotels and the hotel sector has frequently complained that it's at a disadvantage. The government has proposed an online sales tax which it would apply to Airbnb and to Amazon but this was never voted through.

I do think it's quite likely that there will be regulation regarding Airbnb which will require owners to register their properties and pay tax on rental income. This is what happens in most major cities and the amount of tax revenue the DGII is missing by not enforcing this is huge. Additionally you only have to glimpse at this government to recognise how important the hotel sector is and how powerful a role this plays in decision making. So I expect it will happen at some point.

At the moment the lack of regulation means that Airbnbs are not inspected. So they don't have to comply with fire regulations or meet hygiene standards unlike hotels. Or indeed have any form of insurance. At some point a tourist is going to die in an Airbnb and a big fuss will be made and at that point I imagine regulation will be brought in. So enjoy it while it lasts.

All the air bnb i rent are super nice and half the price. much better than the hotels and their gringo price menu's the trick with air bnb is to look for apts from super host and no bars on the windows.

 

[josh2203]

All the air bnb i rent are super nice and half the price. much better than the hotels and their gringo price menu's the trick with air bnb is to look for apts from super host and no bars on the windows.

I have to agree with all of this... With a family, we do prefer having a private pool and private grounds... If we want to dine out, we can go and find a restaurant... We've never been to a hotel/resort in the DR and probably never will, it will always be a private villa... The price difference is not even a factor...

 

[JD Jones]

I have to agree with all of this... With a family, we do prefer having a private pool and private grounds... If we want to dine out, we can go and find a restaurant... We've never been to a hotel/resort in the DR and probably never will, it will always be a private villa... The price difference is not even a factor...

There are some great deals on villas in Cabrera. One may suffer sticker shock when they see the per night rate, but when you divide it by the number of persons it becomes very attractive, considering you are getting a private villa with all the amenities and most come with staff and chef.

 

[RDKNIGHT]

I have to agree with all of this... With a family, we do prefer having a private pool and private grounds... If we want to dine out, we can go and find a restaurant... We've never been to a hotel/resort in the DR and probably never will, it will always be a private villa... The price difference is not even a factor...

big price difference... and also with an air bnb you can bring anyone you want to the apt..

 

[rubio_higuey]

And if you are a repeat visitor, you can then negotiate directly with the owner on a direct base and cut the Airbnb commission and get a better price.

 

[MariaRubia]

Yes it's cheaper, but as the OP has said, the hotels are forced to charge 18% for ITBIS and also 10% Propina Legal. And the hotels are forced to have CCTV (after the incident in Bavaro a couple of years ago, this is now mandatory), insurance, fire safety certification, hygiene checks etc. etc. The current system is completely unfair, especially for smaller hotels.

 

[MariaRubia]

I would say that for renters it's a great deal at the moment. But I wouldn't be in a rush to invest heavily in AirBnb properties in Dom Rep as I cannot see this will go on for much longer.