How to Start an Airbnb in the Cayman Islands: Step by Step

The steps at a glance

Starting a short-term rental in Cayman takes about nine steps, and the order matters: the licence comes before the listing, not after it.

1. Check that strata by-laws (for a condo) and planning allow short-term letting.
2. Apply to the Department of Tourism (DoT) for a Tourism Accommodation Licence and pay the fee.
3. Book and pass inspections by DoT, Environmental Health and the Fire Service.
4. Insure the property for paying guests.
5. Once the licence is issued, create the Airbnb listing.
6. Set prices that account for the 13% tax.
7. Keep a record of every stay and every exempt guest.
8. File a tax return by the 28th of every month, starting with your first month.
9. Renew the licence every summer before it expires on 31 August.

The licence guide and the tax guide cover the rules in depth. This article puts them in sequence and adds the practical parts in between.

1. Check strata rules and planning first

Before you spend money on furniture or a licence fee, confirm that the property can be let to visitors at all. DoT licenses the accommodation, but a tourism licence does not override the rules of your building or your title.

• Condos and townhouses: read the registered strata by-laws and any restrictions noted on your land register. Some developments set minimum letting periods, require a particular rental manager, or have rules on guest registration, parking and pool use. Ask the executive committee whether any by-law changes are being proposed.
• Houses: check your deed for restrictive covenants and, if you plan building work or a change of use, speak to the Department of Planning before you start.
• Mortgage: some lenders restrict commercial letting. Check your facility letter or ask the bank.

If you are still choosing a property, do this check before you sign. It is much harder to change a strata's rules after you have bought into it.

2. Apply for the Tourism Accommodation Licence

The Tourism Law (1995 Revision) says no one may operate tourist accommodation unless licensed by the Hotels Licensing Board, and DoT applies that to Airbnb and every other short-term rental. You may not operate or promote the property until the licence is issued - so no live listing, not even with blocked dates.

1. Download the application form (form TL1) from the Related Documents section of DoT's Licensing and Inspection page. It asks for the owner, the operator, any local manager, the block and parcel number, and a capacity sheet listing bedrooms, beds, sofa beds and maximum occupancy for each unit.
2. Give the property a name. The form says the property must have a valid name - it is what appears on your licence.
3. Pay the fee: CI$250 a year for 1–10 bedrooms. DoT's page lists CI$25 for each bedroom over 10; confirm the current schedule when you apply.
4. Submit by emailing the signed form to ar@caymanislands.ky, or in person at DoT in the Government Administration Building, George Town.

Owners who live overseas often name a local manager or operator on the form. Whoever is named as operator is the person DoT deals with, and the person responsible for the monthly tax returns - agree that in writing if it is not you.

DoT's licence information sheet also says the law requires a representative of the property to be there to check guests in. If you plan self check-in with a lockbox or smart lock, ask DoT how that applies to your property before you rely on it.

3. Pass three inspections

After you apply and pay, you book three separate inspections yourself: DoT, the Department of Environmental Health and the Cayman Islands Fire Service. The licence is refused if any one of them fails, and DoT's page gives the inspectors' contact details.

• The owner or property manager must be at the property for each inspection.
• Inspections are booked for when the property is empty, so do them before you have guests.
• The Fire Service publishes basic requirements for guest houses and single apartments, covering fire extinguishers, smoke detectors, carbon monoxide detectors where there is propane, barbecue placement and deck railings.
• DoT checks furnishing and equipment against its own checklist, from kitchenware to linens.
• Environmental Health looks at sanitation, water supply, pest control, garbage and any pool.

If an inspection fails, the inspector tells you why, you fix it and book a re-inspection. Once all three pass, the reports go to the Hotels Licensing Board. DoT says you should receive your licence within about four weeks; older reports put the whole process at 60–90 days. You are not licensed until the licence itself arrives, and it must be displayed somewhere visible inside the property.

4. Insure the property for paying guests

A standard homeowner's or condo policy may not cover a property let to paying guests. Tell your insurer you are running a licensed short-term rental and get written confirmation of what is covered: damage by guests, liability if a guest is injured, loss of rental income, and windstorm.

For a condo, find out what the strata's master policy covers (usually the building and common property) and what you must insure yourself (usually contents, interior fittings and your own liability). Platform host protection programmes are not a substitute for insurance - read their terms and exclusions before relying on them.

5. Set up the listing

Create or publish the Airbnb listing only once the licence is in your hands. Then set it up so the rest of the year is easy:

• Use the licensed property name and address consistently on Airbnb, VRBO and any direct-booking site, so your records match your licence.
• Match the capacity to your licence. The maximum guests on the listing should not exceed the occupancy you declared on the capacity sheet.
• Keep the room rate and other charges separate. Set a nightly price and, if you charge one, a separate cleaning fee. The DoT return separates the two (more below).
• Write house rules that reflect your strata by-laws - noise, parking, pool hours - so guests are told before they arrive.
• Get listed with DoT too. Licensed properties can apply to appear on the official visitor website, VisitCaymanIslands.com, through DoT.

6. Price with the 13% in mind

Airbnb does not collect or remit tourist tax in the Cayman Islands - Cayman is not on its list of places where it collects occupancy tax. You owe 13% of the room charge for every visitor stay, whatever you charged, so build it into your pricing from the start.

The tax is 13% of the room charge - nights × nightly room rate - calculated before your own costs. DoT's tax guidance says cleaning, electricity, maintenance and agent fees are not deducted first, and Airbnb's host service fee does not reduce it either.

Many Cayman hosts add the 13% to what the guest pays, often as a separate fee line, so the tax does not come out of their margin. Whichever way you do it, keep a clear record of which part of each booking is the room rate - that is the number the return asks for. If you are unsure how a particular charge should be treated, ask DoT Accounts Receivable before your first return, then treat it the same way every month.

7. Keep guest records from the first booking

Each monthly return is backed by records, and the time to set up a system is before the first guest arrives, not on the 27th of the month. For every stay, keep:

• Arrival and departure dates, nights, and the reservation code.
• Number of guests and the lead guest's name.
• The nightly room rate, the room charge, and the guest's total bill.
• A folio or receipt - DoT asks for these with each return.
• For Caymanian or resident guests, a copy of their proof of status (for example a Caymanian passport, a passport with a permit stamp, or a voter card), because their stays are exempt only with proof.
• For non-paying guests such as family or friends, a note and any proof that no money changed hands.

Airbnb's earnings CSV export has most of these fields. Download it monthly and keep it with the return you file.

8. File a return every month from day one

From the month your licence is issued, a Tourist Accommodation Tax return is due every month by the 28th of the following month - including months with no guests, which need a nil return. If the 28th falls on a weekend or public holiday, the deadline is the working day before.

1. Fill in DoT's return form: one row per stay, reported in the month the guest checks out. The column-by-column guide shows where each figure goes.
2. Email it with the folios to ar@caymanislands.ky.
3. Pay by local bank transfer from a Cayman bank, wire, direct deposit or at the DoT cashier. DoT asks you to send the documents first and confirm with Accounts Receivable (345-949-0623) before paying.

A late or incomplete return gets an automatic 20% surcharge on that month's tax, and DoT cannot waive it. Allow at least one business day for a bank transfer to reach DoT - transfer times vary by bank - so aim to file and pay one business day before the deadline. The deadlines calendar has every date worked out, including the public holidays that move them.

DoT's licensing pages also ask licensed properties for a monthly occupancy report, separate from the tax return. Its documents give different due dates for it, so ask DoT what it expects from you when your licence is issued.

9. Renew the licence every year

Licences for apartments, condos, villas and guesthouses expire on 31 August every year, whenever in the year you were first licensed. The Tourism Law sets 1 August as the renewal application date, and you must hold a valid licence on 1 September to keep taking guests.

Renewal is not a formality: you submit a new application and fee, and DoT says all three inspections are repeated every year, during the summer before the August expiry. Inspection slots fill up, so apply and book early. Two other events also need DoT:

• A hurricane or other natural disaster. DoT says licences become void after a disaster until the property has been re-inspected and confirmed safe.
• A change of operator or manager. A new operator needs a new application and fee; a new property manager needs a new application form but no fee. A licence does not transfer when the property is sold.

Running costs to budget

Cayman has no income tax, no capital gains tax and no annual property tax, but a short-term rental has its own costs. Budget for these before you work out what the property earns:

If you are buying, add stamp duty to the purchase cost: it has generally been 7.5% of the price or market value, and since 1 January 2026 it is 10% for properties of CI$2 million or more. Concessions exist for first-time Caymanian buyers; your attorney will confirm the rate for your purchase.

One more thing to watch: with about 1,270 licensed properties against more than 1,500 active listings in 2026, according to Cayman News Service, and housing policy discussing limits on short-term rentals, the licensed route is the one to be on from the start.

Once you are licensed, Hosts.ky takes care of step 8: it imports your Airbnb bookings, fills in the DoT return each month, and reminds you before every deadline and before your licence renewal.