KPMG recommends recalculating property taxes
KPMG Jamaica has advised its clients to recalculate property tax assessments in order to avoid overpaying.
It comes as the Government announced an adjustment to the property taxes last week.
"When you get your property tax assessment, do a recalculation," said Norman Rainford, head of tax at KPMG Jamaica, while citing one instance where an assessment for $20,000 was reduced to $14,000 after recomputing the information.
"Sometimes we just get it and pay - but I strongly suggest looking through the tables and recomputing," Rainford said during a Post-Budget Breakfast Forum hosted by KPMG in Kingston last Thursday.
Last Tuesday, Minister of Finance Audley Shaw announced that the Government would introduce a progressive tax regime above the flat rate for property taxes, with eight bands ranging from 0.5 per cent to 0.9 per cent.
The new rates were a reduction from the initial tax rates announced in March that ranged from 0.8 per cent to a high of 1.3 per cent of the land value. The flat rate of $1,000 will remain on all properties with a value of up to $400,000.
Yanique Jolly-Stone, tax manager and in-house counsel at KPMG Jamaica, indicated that property owners who are in disagreement with their assessment can object on specific grounds, including evidencing that the value assessed is too high or too low; the lands set for one valuation was valued separately; or the person named in the notice is not the owner of the land.
She added that persons can apply for discretionary relief on grounds of the use of the land, or second, the status of the owner being a pensioner, elderly, widower, physically challenged or other reason.
"We are hearing that the commercial sector, on average, will see property tax increases ranging between 200 to 600 per cent," Jolly-Stone said at the forum.
Those increases are well above Shaw's estimate. The minister has said that with the new rates, the average increase for commercial properties was around 58 per cent while residential properties would rise by roughly 10 per cent, relative to the property taxes paid last year.
A land valuation exercise was completed by the Commissioner of Land Valuations in 2013, which resulted in a "significant increase" in the unimproved value of all real estate located in Jamaica, KPMG indicated, adding that these new unimproved values form the basis for the assessment of property taxes.
Government plans to raise $13.5 billion in new tax measures for the 2017-18 fiscal year, funds needed to help finance the increase in the income tax threshold to $1.5 million. It aims to collect $488.6 billion in taxes, overall.