Bermuda could be “shut down” if holiday rental accommodation owners decide to delist their properties in response to a new law requiring them to pay an annual fee to operate, industry representatives claim.

The Bermuda Rental Association of Vacation-Home Owners claims some of its 300 members are already taking their properties off the rental market after the implementation of the Vacation Rental (Application and Registration) Fees Act 2023 on September 1.

It is their view that the industry is being triple taxed — once through land tax, secondly through a Bermuda Tourism Authority fee and now a third fee based on the annual rental value.

A spokeswoman for the rental accommodation organisation told The Royal Gazette: “If people have bookings in October and November but we are not licensed, are they going to turn those people back to the airport?

“We have some high-profile events coming up, not least the [Butterfield Bermuda Championship]. If we are operating illegally, where are these people going to stay? There are no hotel beds, they are staying in our vacation rentals. If we delist them, the island will shut down — it will affect the airlines, taxi drivers, grocery stores, gas stations — everyone will suffer. Does government want this situation to bring island to its knees?

“The Minister of Tourism, Vance Campbell, is in a slight dilemma as he did not anticipate this level of pushback. The minister is concerned about losing vacation rentals with no hotel beds on the horizon and realises that many hosts can actually delist their properties.

“The bottom line is that quite a few decided they will no longer do vacation rentals. That is the general consensus across the board.”

The legislation sets an annual fee to rental property owners based on the property’s annual rental value.

Properties with an annual value below $22,800 will pay $1,500 a year, those valued between $22,801 to $90,000 will pay $2,000, and a $2,500 yearly fee for rental value at $90,001 and above.

The spokeswoman said the legislation overlooks numerous operational costs incurred by an industry still reeling from the Covid-19 pandemic.

The Royal Gazette reported last week that the group wrote a letter to David Burt and Mr Campbell requesting that they postpone enforcement of noncompliance with the law until a workable solution can be reached.

The letter said the tax is regressive and puts a disproportionate financial burden on rental properties generating lower incomes.

The association said that industry stakeholders were not properly consulted over the legislation and gave the Government two weeks to come to the table.

Furthermore, the group said that the fee is “discriminatory“ given that hotels are not subject to the fee yet they use holiday rental sites to compete in the market.

They also joined associations representing several industries in a series of protests against government policies they say are harming their livelihoods.

The spokeswoman added: “We joined the protest so that Government understands the depth and breadth of the issues, and the serious concerns that need to be addressed.

“We want the Government to stop enforcement immediately of the new legislation until we can have consultation with them as a group. We would like to hold a forum so that we can all come together ask questions and have them answered.”