Renting Out Your Cayman Property:
The Tourism Licence, the 13% Tax and the Policy Risk

Cayman has a clear, formal system for short-term rentals: a licence, inspections and a monthly tax return. The system is also under scrutiny, which is worth understanding before buying a condo specifically to let.

The Tourism Accommodation Licence

Anyone letting a property to visitors on a short-term basis needs a Tourism Accommodation Licence from the Department of Tourism. The application is annual, and the process includes inspections by the Department of Tourism, the Department of Environmental Health and the Fire Service. The Department's guidance, as cited by a Cayman housing guide, says a property should not advertise or accept visitors until the licence is issued. The fee is CI$250 a year for one to ten bedrooms, regardless of how much the property earns, and a property must also be correctly zoned for short-term letting.

The 13% Tourist Accommodation Tax

A 13% tax applies to the gross room rate on all bookings, a rule in place since 1 January 2014. Licensed operators submit monthly returns by the 28th of the following month, including a nil return when no tax is due, and late tax automatically attracts a 20% penalty. The Department of Tourism describes itself as a collection agency and cannot waive the tax.

No income tax

The Cayman Islands levies no income tax, so the rental income itself is not taxed locally, in line with the tax regime covered in our legal and tax guide to the Cayman Islands. An owner who is tax-resident elsewhere should check what their home country does with the income.

How enforcement works

Enforcement appears light. The Department of Tourism received zero complaints about unlicensed rentals in 2023 and one in 2024, according to a Freedom of Information response reported by Cayman Compass, and says it reviews Airbnb listings in regular industry scans and engages directly with unlicensed owners it finds. Department of Tourism data show just 24 licensed hotels, about 35% of the room stock, so most visitor accommodation is not hotels.

The policy risk

A consultants' report cited by Cayman Compass in May 2026 found that the spread of short-term rentals through platforms has significantly reduced the supply of long-term rentals and worsened the housing crisis. The Tourist Accommodation Tax on licensed rentals raised about $22 million in 2022, and the report observed that government has little financial incentive to limit them. A July 2026 Cayman News Service article questioned whether a flat licence fee is the right design. No change has been announced, so this is a risk to watch, not a forecast.

What this means for a buyer

Budget for the licence fee and annual inspections, the 13% tax collected from guests, and monthly filing. Before buying a condo for rental income, check its strata by-laws and zoning, and treat the current regime as something that may tighten.