Renting Your Barbados Property:
Registration, Levies and the VAT Rate Question

Barbados has a clearer short-term rental framework than most islands in this series, and it is easier to follow if the obligations are separated into registration, levies and taxes. One of the numbers, the VAT rate on accommodation, is disputed.

Registration

Anyone letting short-term tourist accommodation is expected to register with the Barbados Tourism Product Authority, and registrations are renewed annually. Licensed properties appear in a public directory, and non-residents can operate short-term rentals. Expat Focus says a Tourist Accommodation Bill introduced in 2025 tightens the rules, but that comes from one source, so ask the Authority what applies now.

The Shared Economy Levy

A levy of 10% of the rental rate has applied to short-stay accommodation since April 2019 for hosts who are not registered for VAT. Platforms such as Airbnb now collect and pass it on, and hosts who bill guests directly remit it through the Barbados Revenue Authority's TAMIS portal. A villa-services FAQ also describes a nightly tourism levy of 2.5% of the rate, capped at US$10, which dates from 2018 and may have changed.

VAT, and why the rate is unclear

The general VAT rate is 17.5%, confirmed by the Barbados Revenue Authority, and registration is compulsory above BBD 200,000 of annual turnover. For accommodation, the sources disagree. A villa-services FAQ and a Barbados property guide give 7.5%, the national tourism site gives 8.75%, and PwC's tax summary says the concessionary rate rose from 7.5% to 10% on 1 January 2020. The earlier cost article in this series has been updated to reflect this uncertainty. Ask the Revenue Authority which rate applies to the type of letting you plan.

A land tax rebate worth asking about

Villas certified under the Tourism Development Act receive a 25% rebate on land tax on production of a Barbados Tourism Authority certificate. That is one of the few rental-specific tax benefits in this series, and it is a reason to register properly, not informally.

Income tax

Rental income is taxable in Barbados, and Expat Focus says non-resident landlords face a 25% withholding tax, as of 2024. That figure is from one source. A villa-management guide adds that there is no capital gains tax on property, and that running costs, including management fees, are deductible before tax. Confirm both with an accountant.

What this means for a buyer

Barbados rewards owners who register and file correctly, through the rebate and a clearer set of levies, and it penalises those who assume the rules match another island's. Before buying for rental income, get written answers on three points: the accommodation VAT rate, the withholding position for a non-resident owner, and whether your property qualifies for the Tourism Development Act certificate.