KRALENDIJK – Hotels on Bonaire, Sint Eustatius and Saba will pay higher property taxes starting next year. The House of Representatives approved the Fiscal Omnibus Act BES Islands 2027 on Thursday without debate. The rate for hotels owned by a company will rise from 11 to 12 percent.
The increase is expected to generate approximately $300,000 in additional revenue for the treasury each year. According to the cabinet, the total property tax revenue in Caribbean Netherlands currently amounts to around $9.6 million per year.
Hotels still fall under a lower rate than other commercial real estate. In 2013, the rate for hotels was retroactively reduced from 17.5 to 10 percent, effective from 2011. Since 2025, that reduction has been gradually reversed. The rate was raised to 11 percent at that time; from 1 January 2027 it will become 12 percent.
Objections from the islands
During the preparation of the legislation, calls were made to postpone or scrap the new increase altogether. It was pointed out that the number of hotel rooms on the BES islands has grown faster than tourism. As a result, the average occupancy rate of hotels and resorts has reportedly not improved.
Hotels are also facing higher staffing costs due to increases in the statutory minimum wage. According to responses to the legislative proposal, employers have consequently had to raise other wages within their companies as well.
The cabinet is nevertheless maintaining the increase. According to the government, the rate for hotels owned by companies remains significantly lower than the standard rate of 17.5 percent. In addition, the cabinet states that land values of hotels and resorts have risen considerably since 2013. However, the tax is calculated based on values assessed once every five years, which may lag behind actual market value.
Higher room rates possible
The cabinet acknowledges that hotels may pass on the higher tax in their room or package prices. That is why there is a two-year gap between the first and the second increase. Hotels would thus have sufficient time to renegotiate agreements with tour operators and airlines.
The act also contains other tax changes for Caribbean Netherlands. A fiscal unity for the general expenditure tax (ABB) will be introduced, allowing — under certain conditions — no ABB to be charged on supplies and services between a parent company and its fully owned subsidiaries. Tax exemptions will also be introduced for certain goods and land used for agriculture.
Furthermore, the Tax Authority will be granted greater powers to collect tax debts. Vehicles may be stopped to enforce a writ of execution, and writs may henceforth be served by post. Objections to both measures were also raised during the consultation process.
The legislative proposal still needs to be considered by the Senate. The cabinet aims to have the changes take effect on 1 January 2027.
Read the full legislative proposal here
