The short answer
Whether a Cayman short-term rental is profitable depends far more on your costs and occupancy than on the headline nightly rate. Cayman has no income tax, so what is left after costs is yours locally - but the Tourist Accommodation Tax, strata fees, insurance and electricity are all higher than many overseas owners expect. Work out each line below for your own property before you buy or list.
This article deals with costs only. We do not quote average occupancy or nightly rates, because no official source publishes them for Cayman vacation rentals; use your own booking history, or get comparable figures from a local agent and treat them as estimates.
Buying: stamp duty and closing costs
The largest one-off cost is stamp duty. According to the Cayman Islands Real Estate Brokers Association, the stamp duty rate is 7.5% on all three islands, charged on the purchase price or the market value, whichever is higher; since 1 January 2026 it is 10% for properties of CI$2 million or more. On a CI$500,000 condo that is CI$37,500 (7.5%), paid on completion.
- Caymanian first-time buyers can qualify for reduced or nil duty below set value thresholds. The concession applies to individuals, not companies, and the thresholds have changed several times - check the current figures with the Lands and Survey Department or your attorney.
- Mortgages carry their own stamp duty: CIREBA lists 1% on mortgages under CI$300,000 and 1.5% on larger ones.
- Legal fees for the conveyance, and any survey or valuation the lender asks for.
- Furnishing and setup - furniture, linens, kitchen kit, smart lock, and whatever the licence inspections (DoT, Environmental Health and the Fire Service) require.
Rates and concessions change; confirm them before you sign. Stamp duty is a sunk cost - it comes back to you only through the eventual sale price.
Fixed yearly costs
These you pay whether or not anyone books.
- Tourism Accommodation Licence: CI$250 a year for 1–10 bedrooms (larger properties pay more per bedroom - check with DoT). You cannot legally take a booking without it. See the licence guide.
- Strata fees: most condos charge monthly or quarterly maintenance fees covering the building, grounds, pool and the strata's own insurance. Ask for the last two years of accounts and any planned special levies. Also check the by-laws: some stratas restrict short-term letting.
- Insurance: contents and liability cover that explicitly allows short-term letting, plus buildings cover if you own a house rather than a condo. Policies usually carry a separate, higher deductible for named storms or windstorm, often set as a percentage of the insured value - read that clause before you compare premiums.
- Internet, cable and streaming - guests expect fast Wi-Fi.
- Mortgage interest, if you borrowed.
Costs on every booking
These scale with how often you are booked.
- Tourist Accommodation Tax, 13% of the room charge (nights × nightly rate). DoT calculates it on the gross room rate, before your own costs. Airbnb does not collect it in Cayman - it is not on Airbnb's occupancy tax list - so you file and pay every month. Many hosts add it to the guest price; see charging the tax to guests. If you do not, it comes straight out of your margin.
- Airbnb host service fee: Airbnb's fee page lists a split fee of typically 3% for the host (the guest pays a separate fee), or a host-only fee that most hosts on that structure pay at 15.5%. Airbnb is moving hosts to the host-only fee and it is mandatory for anyone using property management software. The fee does not reduce the 13% tax.
- Cleaning and laundry for every turnover. A cleaning fee charged to guests can offset this.
- Consumables: toiletries, coffee, paper goods, replacement towels.
- Card or bank charges on direct bookings, and the cost of paying DoT from abroad if you have no Cayman bank account.
Running costs: power, maintenance, management
Electricity is the line that surprises overseas owners most. CUC's average residential customer used 1,158 kWh a month in 2025, and the fuel portion of the bill moves with oil prices - in July 2026 CUC said the average customer's June bill rose by about $63 from fuel costs alone, before a government relief credit. Guests run air-conditioning hard, so budget from the actual bills of the unit you are buying, not from a national average.
- Water and, for houses, garbage and pest control.
- Maintenance: salt air is hard on AC units, appliances, door hardware and outdoor furniture. Set aside money each year for repairs and replacements.
- Property management, if you do not live on island. Managers charge a percentage of revenue or a fixed fee; either way it is often the largest single cost after the tax.
- Lost income from cancellations. If a booking is cancelled under Airbnb's Major Disruptive Events Policy, the host receives no payout for the cancelled dates.
A worked example (hypothetical figures)
These are made-up round numbers to show the arithmetic, not market data. Say a two-bedroom condo bought for US$600,000, booked 200 nights a year at US$300 a night, with 40 stays and a US$150 cleaning fee each. The host does not add the 13% to the guest price and uses Airbnb's split fee. All figures in US$.
| Line | Basis (example) | Per year |
|---|---|---|
| Room charges | 200 nights × $300 | $60,000 |
| Cleaning fees collected | 40 stays × $150 | $6,000 |
| Gross income | $66,000 | |
| Tourist Accommodation Tax | 13% × $60,000 | −$7,800 |
| Airbnb host fee | 3% × $66,000 | −$1,980 |
| Licence | CI$250 | −$305 |
| Cleaning and laundry | 40 × $120 | −$4,800 |
| Strata fees | assumed | −$9,000 |
| Insurance | assumed | −$5,000 |
| Electricity, water, internet | assumed | −$6,000 |
| Maintenance and replacements | assumed | −$4,000 |
| Supplies | assumed | −$1,500 |
| Net before management and mortgage | $25,615 |
On a cash purchase of $600,000 plus $45,000 stamp duty (7.5%), that is a return of about 4% a year before any management fee, mortgage interest, or tax in your home country - and before any change in the property's value. Add a manager or a mortgage and it falls further; add the 13% to your guest price and it rises by up to the $7,800 the host absorbed here, depending on whether guests accept the higher price.
Two lines in the example do not depend on your skill as a host: the tax and the strata fee. Occupancy does - 160 nights instead of 200 removes $12,000 of room charges but only part of the costs.
What moves the result
- Occupancy and rate - the biggest driver, and the least certain.
- Who carries the 13% - you or the guest.
- Strata fees and by-laws - a high fee or a ban on short lets can sink the numbers.
- Management - doing it yourself saves the fee but costs time, and is hard from abroad.
- Penalties you can avoid - a late return costs an automatic 20% of that month's tax, and nil returns are due in empty months too.
- Regulation - the 2026 housing policy floats caps on short-term rentals; see the rules and proposals.
If you live in the US, Canada or the UK, your home country may tax the profit even though Cayman does not. Speak to a tax adviser before you rely on any net figure.
Hosts.ky takes the paperwork cost off the list: it builds each month's DoT return from your Airbnb bookings and reminds you before the 28th, so the 13% never turns into 15.6%.