Stamp duty, transfer tax to be reduced
The Jamaican Government is to reduce stamp duty and transfer tax on real estate transactions, acceding to appeals from the Realtors Association of Jamaica (RAJ).
But while Minister Without Portfolio Dr Horace Chang announced that the adjustments were pending, he did not indicate the size of the cuts or the time frame in which it would be done.
"This will be done as part of a total tax reform," said Chang at the RAJ's 50th anniversary symposium on Tuesday.
"There will be change in form, but no change in substance because when we are government, we have to look at the total picture. In opposition, we deal with principles; in government we are realists," Chang told the realtors.
He also said the Rent Restriction Act will be revised.
Referring to the broader plan by the Holness administration for tax reform a programme which includes a near tripling of the income tax threshold to $1.5 million and offset some of the cost through higher consumption taxes Chang assured the meeting, the commitment to amend the real estate taxes would be kept.
"The reduction of any transaction tax will help to stimulate the economy," he asserted, saying the market saw increased activity the last time the real estate taxes were reduced.
Two weeks ago, the RAJ went public with its plan to lobby for reductions in stamp duty and transfer tax levels in effect before the Jamaica-IMF extended fund facility agreement of 2013.
The RAJ's ultimate goal is a total elimination of the taxes, according to president Edwin Wint, but is satisfied for now with plans for a rollback, saying his organisation would not want the IMF programme to be affected.
"I'm of the view that it could be done in a five-year period, but that would have to be done in tandem with the other revenue streams that come on board and the kind of growth that would generate even more revenue ... so that reducing it would not throw out the sort of targets that we have to meet," Wint commented to Wednesday Business after Chang's announcement.
After the 2013 IMF agreement, transfer tax increased by one percentage point to five per cent and stamp duty by one point to four per cent.