How to Legally Operate a Tourist Accommodation in Barbados: A Guide for New Property Owners

Barbados isn’t just a tropical escape for sunseekers, it’s quickly becoming a hot spot for savvy short-term rental investors. With its postcard-perfect beaches, stable government, and proximity to major international hubs, Barbados offers the ideal mix of Caribbean beauty and business opportunity. But before you list that beach villa on Airbnb, there are rules you must follow.

In this guide, we break down the legal requirements for short-term rentals (STRs) in Barbados and explain why this island could be your next smart investment.

Why Choose Barbados for a Short-Term Rental?

Barbados is more than just rum punch and turquoise waters. Here's why property investors are paying close attention:

• Strategic Location: Close to the U.S., Canada, and South America, with direct flights from New York, Toronto, Miami, London, and more.
• High Demand for Luxury Stays: With a growing market for villas, boutique apartments, and remote work-friendly properties, tourism remains strong year-round.
• No Residency Requirement: Non-citizens can buy and operate STRs without needing to live in Barbados.
• Stable Political Climate & English-Speaking: Ideal for international investors seeking reliability and clear communication.

What Counts as a Short-Term Rental in Barbados?

Barbados classifies short-term rentals under the legal umbrella of “tourist accommodation.” This includes:

• Apartments: are 3 or more self-contained units with self-catering facilities.
• Guest Houses: are houses with 3+ bedrooms with meals served to residents.
• Hotels: are buildings with  10+ bedrooms, serving meals to residents and non-residents.
• Villas: are high-value homes with at least 3 bedrooms, registered and professionally managed.

If you're offering your property to tourists for a fee even just occasionally, it counts as tourist accommodation and must be licensed.

Legal Requirements to Operate a Tourist Accommodation in Barbados

To operate any type of tourist accommodation in Barbados, you must meet certain government-approved standards. These include:

Licensing

You must apply for a Tourist Accommodation License before operating. It’s:

• Issued by the BTA
• Valid until December 31 each year
• Renewable annually by January 1

Can an Third Party Apply for Me?

Yes. Property owners can authorize real estate agents or third parties to handle registration and licensing. Need help with licensing? Lodge Compliance can assist you with the entire process from registration to approval. Click here to get licensed.

Taxes & Fees

1. Shared Economy Levy (SEL) – 10%

• Applicability: This levy applies to all tourist accommodations, including apartments, guest houses, villas, and vacation rentals, especially those not registered for Value Added Tax (VAT).
• Rate: 10% of the accommodation cost.
• Collection: Hosts are required to collect this levy from guests at the time of booking or payment.
• Remittance: The collected levy must be reported and paid to the Barbados Revenue Authority (BRA) via the Tax Administration Management Information System (TAMIS).
• Reporting: Hosts must complete the "Room, Product and Shared Economy Levy Schedule" and upload it as a PDF when filing their VAT return.

2. Income Tax on Rental Income – 15%

• Applicability: Income earned from residential property rentals is subject to income tax.
• Rate: 15% on net rental income.
• Filing: Individuals earning more than 25% of their total assessable income from business or rent must pay income tax in three installments, each representing 25% of the previous year's income tax liability, on June 15, September 15, and December 15.

3. Value Added Tax (VAT) – 7.5% or 17.5%

• Applicability: If your annual turnover from rental activities exceeds BBD $200,000, VAT registration is mandatory. Voluntary registration is permitted below this threshold.
• Rates:
  • 7.5% for direct tourism services, including accommodations.
  • 17.5% for standard supplies.
• Registration: VAT registration is conducted through the BRA.
• Filing: VAT returns are typically filed monthly or quarterly, depending on the business's size and nature

Need help with tax registrations, filing of tax returns, remittance or staying compliant with Barbados’ tax laws? Lodge Compliance can handle it all from Shared Economy Levy filings to VAT setup and income tax submissions, we take the stress out of STR tax compliance. Click here to get started.

Property Standards

Before you can welcome guests, your rental property needs to meet a few basic, but very important standards. Think of it like prepping your home for a VIP visitor (because that’s exactly what your guests are).

Your property should be:

• Clean, safe, and in good repair: we’re talking working plumbing, secure locks, and no electrical hazards.
• Well-maintained and guest-ready: Your property must have ****functioning appliances to fresh linens and a presentable exterior.
• Up to inspection standards: Government ****officials may inspect your property before issuing your license to ensure everything checks out.
• Parking Requirement: provide adequate parking to avoid disturbing neighbors, and the number of available parking should align with the number of guests that is permitted on the property.

If your place doesn’t meet these minimum requirements, your license could be suspended, or even revoked. So it’s not just about making a great first impression on guests. it’s also about staying compliant.

What Documents Are Needed for Obtaining a License?

The document needed to obtain a license include;

• Proof of ownership or management
• Property details (rooms, amenities)
• Safety compliance (e.g., fire extinguisher, smoke detectors)
• Tax identification and registration info

What About Trash and Health Regulations?

You’re responsible for ensuring proper trash collection and disposal under the Health Services (Collection and Disposal of Refuse) Regulations, 1975. Poor sanitation can lead to license suspension or rejection.

🛡️ Do You Need Insurance?

Absolutely, if you’re renting out your property to guests, even just occasionally then a liability insurance isn’t just a good idea, it’s essential. Accidents happen, and if a guest gets injured or damages your property, you could be on the hook for thousands. That’s why carrying your own liability insurance with at least BBD $500,000 in coverage is highly recommended.

While platforms like Airbnb may offer some limited protection, it often doesn’t cover everything, and it’s not tailored to your specific situation. Having a dedicated policy gives you real peace of mind, knowing you're covered against unexpected claims, legal costs, and serious financial risks.

🌍 Want to List on Airbnb or Booking.com?

Barbados allows listings on all major OTA platforms. However:

• You must be licensed before listing.
• Tax collection is the responsibility of the host, not the platform.

🏛 Who Regulates It All?

All oversight is centralized through the:

Barbados Tourism Product Authority (BTPA)

Visit: tourism.gov.bb

View full legal act

With strong tourism, no residency requirement, and a simple licensing process, Barbados is one of the most STR-friendly countries in the Caribbean. But success begins with compliance.

Stay informed. Register your property. And treat it like the business it is.

If you need assistance navigating STR licensing, tax compliance, or platform listing. Lodge Compliance is the best solution.

‍