WILLEMSTAD – Curaçao should consider restrictions on foreign property ownership, higher property taxes for foreign buyers and new rules governing short-term rentals as part of a broader effort to protect housing availability for local residents.
Those are among the recommendations contained in a new study by Kristelie A. Isenia examining the impact of foreign real estate investment, household income and government intervention on housing affordability in Curaçao.
The research concludes that foreign investment can benefit the Curaçao economy, but warns that insufficient regulation can contribute to pressure on a housing market already struggling with affordability.
Among the most significant recommendations is the introduction of restrictions on foreign ownership in segments of the housing market where affordability pressures are particularly high.
The study also suggests that housing policy should favor owner-occupied residential property rather than purchases made purely for investment purposes.
Short-term rentals are another area identified for possible intervention.
The report recommends introducing rules for residential properties used for platforms such as Airbnb to prevent homes that could otherwise serve local residents from being removed from the long-term housing market.
Under the proposal outlined in the study, short-term rentals could require formal approval based on criteria including the property’s location, local housing demand and the existing availability of long-term rental housing.
The study also raises the possibility of changing Curaçao’s tax system.
It recommends considering a higher land-tax bracket for foreign buyers purchasing residential property or land. According to the report, residents and non-residents currently face similar tax rates, which the author argues may not sufficiently reflect their different effects on the housing market.
Foreign owners who purchase homes exclusively to generate rental income should also be appropriately taxed on those earnings, the report says.
Another proposal is a tax on vacant properties. Such a measure could discourage owners from leaving houses unused and potentially return more properties to the market.
However, the recommendations extend beyond foreign buyers.
The study calls for expansion of affordable housing programs and subsidies for first-time homebuyers. It also identifies high construction costs as a major obstacle and proposes measures including lower import duties on construction materials and greater use of cost-efficient and innovative building methods.
Access to financing should also be improved through more flexible lending conditions and broader financial support mechanisms.
The proposals are based partly on a survey of 100 residents. Participants strongly agreed that government intervention is important to housing affordability, producing an overall average score of 4.10 on a five-point scale.
The statement that government intervention is essential to improve housing affordability received an average score of 4.16, while the proposition that government housing policies and decisions can improve access to affordable housing scored 4.13.
The study stops short of arguing that foreign investment should be discouraged altogether.
Instead, it says foreign capital can contribute to economic growth but requires careful regulation to balance those benefits against the housing needs of Curaçao residents.
The report ultimately calls for government, banks and private-sector stakeholders to work together on housing supply, taxation, financing and market regulation rather than treating each problem separately.