A citizen in Curaçao has submitted a noteworthy petition (see related story) to consider rental income a protected pension for tax purposes. The reasoning is that because a lot of workers only depend on the AOV old age pension that is far below a living wage when they retire, many instead build apartments while working so they can rent these out to make an extra buck.
The discussion seems interesting also for St. Maarten, where is has become increasingly difficult for people to obtain long-term affordable housing. The main reason is that much of the country’s available real estate is geared towards visitors, considered a more lucrative and hassle-free market.
This is something that affects other tourism destinations too, especially with a large number of so-called vacation homes. The reality is also that these are often made short-term rentals by their non-resident owners who are not even registered taxpayers, creating unfair competition with fiscally compliant local landlords.
But what has exasperated the problem is the advent of Airbnb and other vacation rental platforms. Property owners prefer to not only earn more this way but avoid having to vacate delinquent tenants. In other words, the reward is considered comparatively greater and the risk lower.
A contributing factor remains that the majority of those who offer vacation rentals online don’t currently pay tax on such. That needs to be addressed post-haste to level the playing field at least somewhat for traditional hotels and resorts as well as regular folks just trying to find a payable home.
