Many foreign owners in Grenada plan to cover their costs by letting the property when they are not using it. It can work, but the numbers are rarely as good as the first spreadsheet suggests. Tourist demand is seasonal, management fees are significant, taxes apply to rental income, and salt air and storms push maintenance costs up year after year.
This page sets out the choice between holiday letting and long-term tenants, the tax and licensing points owners need to deal with, how management arrangements usually work, and how to estimate a realistic return. Tax rules are summarised as commonly understood at the time of writing; confirm your own position with the Inland Revenue Division or a licensed accountant before you let.
Holiday letting or long-term tenants?
Holiday letting earns more per night but far less reliably. Demand from visitors is strongest from December to April, with peaks around Christmas, Easter and Spicemas in August, and weakest in September and October at the height of the hurricane season. A villa that is full in February can sit empty for weeks in the autumn. Holiday lets also need cleaning, linen, guest communication, online listings and someone on call around the clock.
Long-term letting earns less but steadily. In the south-west, demand from St George's University students and staff keeps apartments around True Blue and Grand Anse occupied through the academic year. Professionals on contracts, medical staff and returning nationals rent houses for a year or more. Wear and tear is higher with students; management effort is lower overall.
Some owners combine the two: a long let for most of the year and personal use for a few weeks. Others use a property manager for holiday lets and keep the dates they want for themselves. Decide first how much you want to use the house, because that limits what kind of letting is possible, and furnish accordingly.
Income tax and withholding
Rental income is taxable in Grenada. Income from property in Grenada is Grenadian-source income. Individuals are taxed at 10% on the first EC$24,000 of taxable income and 28% above that, after allowances, and expenses such as repairs, management fees, insurance and property tax can generally be deducted. Companies pay corporate tax at 28%.
Non-resident owners. Payments of rent to a non-resident can be subject to withholding tax at 15%, deducted by the person paying. Where a manager or tenant pays your rent to you abroad, ask your accountant how withholding and filing should be handled.
Your home country. If you are tax resident elsewhere, you will normally have to declare the rental income there too. Whether credit is given for Grenadian tax depends on your home country's rules and any treaty.
Keep records. Keep bookings, invoices, receipts and bank statements for every expense, in EC or US dollars, and file returns by the deadline of 31 March following the tax year for individuals. Penalties for late filing and payment are steep.
VAT, licensing and the rules for holiday accommodation
Grenada charges VAT at a reduced rate of 10% within the tourism sector, including accommodation, while the standard rate is 15%. Registration is compulsory once taxable supplies reach EC$300,000 a year; below that, registration is voluntary at the discretion of the Comptroller of Inland Revenue. A single villa may or may not cross the threshold, depending on the rates charged and how bookings are made. Take advice before you start rather than at the end of a good season.
Holiday accommodation offered to visitors may also need to be registered or licensed with the tourism authorities, and properties offered on booking platforms are increasingly checked. Ask the Grenada Tourism Authority what applies to your type of property, and whether minimum standards for safety, such as fire extinguishers and smoke alarms, must be met.
In gated communities, estate rules may restrict or prohibit short-term letting, or require guests to be registered with security. Read the covenants before buying a property you intend to let, because they bind you whatever the national rules allow.
What a property manager does, and what to agree
Owners who live abroad almost always need a manager. Arrangements vary from a caretaker who checks the house to a full holiday rental service. Agree in writing:
- which services are included: marketing, bookings, guest check-in, cleaning, laundry, maintenance, garden and pool;
- the fee, usually a percentage of rental income for holiday lets, and often a lower percentage or a fixed fee for long lets;
- how expenses are approved, with a limit above which the manager must ask first;
- how and when rent is paid to you, and what monthly statements show;
- who holds guests' security deposits and how damage is handled;
- what the manager does before and after a storm: shutters, inspection, photos and insurance claims;
- how either side can end the agreement and hand back keys, records and bookings.
Insurance and risk
Tell your insurer that the property is let, and how. A standard home policy may not cover damage caused by tenants or guests, loss of rental income, or liability if a guest is injured on the property. Landlord or holiday rental policies are designed for this, at a higher premium.
Windstorm cover is essential and expensive. Check the excess for hurricane damage, which is often a percentage of the insured value rather than a fixed amount, and whether the policy covers loss of income while the house is repaired. After a major storm, repairs can take months because builders and materials are scarce.
Liability matters most around pools, balconies and steps. Fit pool fences or covers where children may visit, keep railings sound and provide clear safety information to guests. A claim from an injured guest could outweigh years of rental income, so check the liability limit on your policy.
Working out a realistic return
A simple calculation avoids disappointment. For a year, estimate:
- Gross income: realistic nightly or monthly rates multiplied by realistic occupancy, not the peak-season rate for 52 weeks;
- minus management fees and booking platform commissions;
- minus cleaning, laundry, guest supplies and utilities, which owners often pay for holiday lets;
- minus insurance, property tax, estate fees and maintenance, including periodic repainting and replacing appliances;
- minus income tax and any VAT you must account for;
- equals net income, which you can divide by the total cost of buying and furnishing to see the true yield.
- Many owners find net yields far lower than gross yields once every cost is counted. Treat letting as a way to offset costs rather than a reliable investment return, unless the numbers clearly say otherwise. Run the calculation again with occupancy ten points lower than your estimate; if the result still works, the plan is robust.
Common mistakes
Pricing from peak-season listings. High-season rates and low-season reality are very different. Base forecasts on full-year occupancy.
Forgetting tax until the end of the year. Register, keep records and set money aside from the first booking.
Choosing a manager on fees alone. A cheap manager who responds slowly to guests or storms costs more in bad reviews and damage.
Letting without telling the insurer. An undisclosed rental can void cover when you need it most.
Ignoring estate rules. Letting in breach of covenants can lead to fines or disputes with neighbours and the owners' association.
Under-furnishing or over-furnishing. Guests expect working air-conditioning, reliable Wi-Fi, good mattresses and a backup water supply far more than designer pieces. Spend on what generates reviews and bookings.
Frequently asked questions
Do you pay tax on rental income in Grenada?
Yes. Rental income from Grenadian property is taxable in Grenada, at 10% on the first EC$24,000 of taxable income and 28% above for individuals, after allowable expenses. Non-residents may face 15% withholding. Confirm your position with an accountant.
Is VAT charged on holiday rentals in Grenada?
Tourism accommodation is subject to VAT at a reduced rate of 10% where the supplier is registered. Registration is compulsory once taxable supplies reach EC$300,000 a year and voluntary below that. Ask the Inland Revenue Division how this applies to you.
Do holiday rentals in Grenada need a licence?
Accommodation offered to visitors may need to be registered or licensed with the tourism authorities and meet safety standards. Ask the Grenada Tourism Authority what applies to your property before you start taking bookings.
How much do property managers charge in Grenada?
Fees are usually a percentage of rental income, higher for full holiday rental management and lower for long-term lets or caretaking. Compare what each manager includes, not only the percentage, and agree expenses and limits in writing.
Which is better in Grenada, holiday or long-term letting?
Holiday letting can earn more but is seasonal and management-heavy; long-term letting, especially near St George's University, is steadier with lower effort. The right choice depends on how often you want to use the property yourself.
Can you let a property in a gated community in Grenada?
Often, but estate covenants may restrict short-term letting or require guests to register with security. Read the covenants before buying if letting is part of your plan, and ask the owners' association how the rules are enforced.
