Property Tax Bill passed

The controversial amended Property Tax Bill has been passed in the House of Assembly.{{more}}

The Bill for an Act to make provisions for the valuation of property for rating purposes, the collection of property tax and for connected purposes, despite not receiving support from the Opposition, made its way into the country’s law books on October 11.

Opposition Leader Arnhim Eustace reiterated his objection to the Bill, saying that the amended tax Bill could mean added hardships for the people of the nation.

Eustace, during the debate, said legislation of this type was not easy to swallow.

“The prime minister was right in saying that a few years ago I was in favour of a market-based system … and I am still supportive,” Eustace said, adding that the difference is, because of the state of the economy, this is not the best time to enact the legislation.

All taxes have their own impact on the economy, he said.

Increasing food prices and rent after the new tax is implemented were some of the other negatives Eustace cited.

Prime Minister Dr Ralph Gonsalves said that the amended tax Bill would provide some needed finance to fund government projects.

But the Leader of the Opposition explained that the government could not only focus on additional taxation.

Area representative for Central Kingstown St Claire Leacock, in his contribution to the debate, said that the current administration had failed miserably in creating new jobs ,during the years when the economy was doing well.

Leacock explained that had the government been successful in creating jobs there would have been enough people now owning property and making contributions under the Annual Rental Valuation system, which the Market-Based Assessment now replaces.

He added that property value often went up and this could prove problematic.

“I have no appreciation for the market value approach; I’m not sold on the market value,” Leacock said.

But the Prime Minister responded, saying that provisions were put in which allow for a cap where persons may have improved their property and in so doing, increased the property value.

Gonsalves explained that the new market value based tax in some instances would be advantageous to property owners, particularly the poor, who may have properties valued at $50,000 or less, where they are only required to pay $10.

Other advantages he added, included those already in the system, who may end up paying less and that the new system ensures that everyone pays.

Senator and Minister of Transport and Works Julian Francis gave examples which showed that the new method would not always mean more money from people’s pockets.

For example, a property valued at $100,000 at the proposed 0.08 per cent would mean that the property owner would have to pay $80 a year.

Property of value $150,000 – $120 a year; $200,000 – $160; $750,000 would mean a property tax of $600 a year or $50 a month; and a property valued at $1 million would mean a property tax of $800 a year.

The figures Francis used were based on a rate of 0.08 per cent; however the prime minister, in his closing comments, indicated that he may drop the rate to 0.07 per cent.

“It is well established universally that a market system is a better and fairer system on which can base a property tax,” the prime minister explained.

The issue of rental value can be more arbitrary, he continued.

Of those exempted to pay are those with property values of $50,000 or less, who will be required to pay a small fee because of the Possessory Titles Act, which shows evidence that the occupant is not only in possession of the property, but is paying tax on it as well.

“This Bill is a much improved product than what was brought first,” Gonsalves said.

“In the final analysis, the public will want to know how much they will have to pay and at what particular rate and to see the extent of the exemptions,” he continued.

The prime minister, in the 2012 Estimates announced the introduction of the new market-based system to replace the rental value system.

It is anticipated that the government will generate as much as $3.6 million per annum in revenue from the implementation of the new method. (DD)