There's is No Solace in the Land and Building Taxes Regime
Posted: Wednesday, September 11, 2013
By Stephen Kangal
September 11, 2013
The heart and soul, indeed the single most important determining factor in the calculation of the quantum of property taxation for each property is the year in which the requisite rental value -driven valuation was completed and applied. Finance Minister Larry Howai alluded to the fact that by the time residential properties are brought to book again by 2017 the relevant requisite up-to-date valuations will have been completed.
I find it rather puzzling and bizarre to hear the calls from both the Minister of Finance and the Honourable Prime Minister for the return or reinstatement of the repealed 1948 Land and Building Taxes Ordinance (L&B) as being a softer palliative and a superior more humane alternative to the PNM's Act No.18 of 2009. In my view the L&B regime is more onerous and punitive and should be allowed to RIP.
What also is the position/status with Chapter V of the 1990 Municipal Corporations Act that constituted the legal basis for property tax determination and collection exclusively within the cities and boroughs and which was also repealed by the 2009 Act? Are not most of the industrial properties earmarked for 2014 taxation located within that jurisdiction? The L&B regime excludes the cities and boroughs.
The L&B regime imposes a taxation rate of seven and a half percent (7 1/2%) on the annual rateable or taxable value of properties that are based on a current rental values determination and not on the market values of the said property. It also charges ten dollars annually as land tax for properties of less than an acre.
But Act No.18 of 2009 provided for applying a three percent rate of tax reduced by more than half) on the annual taxable value of residential properties that was further reduced by ten percent contrary to the L&B regime. Accordingly it is in my summation a misrepresentation to suggest that the L&B regime should be reinstated as directed by the Honourable Prime Minister because it imposes a higher more onerous rate of tax pegged at 71/2 % on the prevailing rental value of properties and provides an illusionary and misleading soft-landing for potential and current residential property owners.
This L&B statutory relic should stay repealed and interned. A new property tax regime should be drafted based on the requisite widespread consultative process being undertaken with stake-holders.
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