Caribbean Islands Pleased About UK APD Tax Decision

09 June 2011

The Caribbean Tourism Organisation is currently celebrating upon hearing the news the UK government has announced which stated that their new budget will place a freeze on APD charges that were previously resulting in higher aviation taxes for travellers to the tropical islands. It is also hoped that with the lack of these taxes, British tourists will return to the region and holiday home buyers from the UK will be drawn back towards owning second homes in the Caribbean such as St. Kitts real estate and other islands.


The Caribbean has always enjoyed a close connection with Britain, and these sunny islands hold a huge number of British expats who own St. Kitts real estate as well as holiday-goers who make the Caribbean their destination year after year. The Caribbean thrives on the tourism relationship with the UK, receiving more than a million British visitors last year. It is safe to say that British tourism and property investment makes up the lifeblood of the Caribbean economy. It is a mutually beneficial relationship, with the Caribbean islands providing sun-starved and rain-weary Brits with a place to relax and unwind on warm tranquil beaches, and the British visitors providing the islands with a steady stream of tourist cash.


 These Air Passenger Duty travel taxes, which began in November of last year, were having a negative impact on tourism to islands such as St. Kitts and Nevis, and property developers feared that investors would shy away from St. Kitts Real Estate. If the international flight to their St. Kitts Real Estate were to become too expensive, British holiday home buyers would think twice about purchasing a villa on the island.


The reason for the inappropriately high environmental travel tax is because the taxes were calculated by a four tier banding system that measured the amount of duty levied according to the distance between London and the destination country's capital city. However, since New York is on the East Coast of America, the taxes still charged less for flights to Hawaii even though it is 3,000 miles further from the UK than the Caribbean.


Visitors to the Caribbean from the UK had to pay £75 per person in economy class, which was a huge deciding factor on their choice of holiday destination. Those who owned St. Kitts real estate were less likely to fly down to visit it, and those who were considering purchasing St. Kitts real estate might have shifted their search elsewhere.


Resorts and tour operators in the Caribbean had to slash their prices to keep visitors interested, and they suffered as a result. Caribbean tour operator Funway offered to pay the Air Passenger Duty tax for all bookings to Sandals resorts in the region and provided 40% discounts at a few of their resorts.


Now that Britain has officially frozen the Air Passenger Duty tax, directors are suggesting that the levy be subject to further review. Carlos Vogeler, United Nations World Tourism Organization's Director for the Americas has described the tax as unfair and as posing a threat to tourism growth and development.


The Caribbean Tourism Organization has been campaigning for some time now for the current banding systems of the APD to be modified, and they hope that their needs will be heard. The tax is currently being negotiated in government talks.


Caribbean property developers are building many gorgeous new options when it comes to St. Kitts real estate and anticipate that the freeze on taxes will bring many holiday home owners back to these warm tropical islands.

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