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  • Writer's pictureThe San Juan Daily Star

Governor lauds proposal to increase ‘room tax’

Gov. Pedro Pierluisi

By John McPhaul

Gov. Pedro Pierluisi Urrutia on Tuesday expressed approval of a proposal by island mayors to increase the so-called “room tax” on short-term housing rentals.

“I have been hearing and reading about possible regulation of the short-term rental property industry, and something that I do favor is that instead of paying 7%, they pay 8% and that additional percent goes to the municipal coffers, because the municipalities maintain these properties and are the ones who collect garbage, they are the ones who maintain the roads in the area, they provide security,” the governor said in response to questions from the press. “And I know that in the industry, at least in general terms, they do not see this possible increase with displeasure.”

When asked about the impact it would have on the pocketbooks of Puerto Ricans, who are the ones who mostly rent the properties, the governor replied: “Well, yes. Most of these properties, the owners, the vast majority, the vast majority, are Puerto Ricans. That’s right.”

“But at the same time, there are claims that it could be the hotels, it could be the inns, it could be residents of the area,” he said. “And one way to address those claims is the one I’m talking about, which is only a 1% increase in what they pay the government. In this case, it would go to the municipal government. … I am sure that it will not affect the ability of these owners or these property owners to rent [out their lodgings], because there is a huge demand here.”

Pierluisi contended that the impact would be minimal if the growth experienced by tourism is taken into account.

“All these portals on the internet to rent houses here, houses, apartments are, that is, well occupied,” he said. “And I see that industry with approval. Of course, I do not rule out regulation. For example, if in a particular area the percentage of properties is not too high, perhaps it can be regulated. But you have to do it very carefully, because tourism is spearheading it. It’s there, it’s creating thousands of jobs. Right now there are more than 86,000 people employed in the tourism sector. It is the highest number of jobs in any sector in Puerto Rico and that is what we want.”

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