Gov't ministries knock heads as property tax rate hike looms
Land owners are facing the possibility of a new increase in property taxes, two years after the most recent hikes announced by government.
The increases would result from last year's completion of a land-revaluation exercise carried out by the National Land Agency (NLA).
The new property values were, however, not uploaded on the agency's property valuation roll, which effectively spared consumers two consecutive years of land tax increases.
However with all updates to the valuation roll now complete, Alwyn Hales, permanent secretary in the Ministry of Water, Land and Climate Change, told The Gleaner yesterday that the way was now clear for Tax Administration Jamaica (TAJ) to determine the new property tax rates based on the new land values.
"The (property) revaluation has been done and all information has been updated, so what is to happen now is for the TAJ to determine the new tax rates, according to the valuations, because it is the minister of finance who sets those rates," Hales said. "When that is done, then the notices will be sent out to property owners and they will know the new rates as well as the new valuations."
Currently, properties valued at $100,000 are charged a flat rate of $1,000 per annum. However, if the property is valued above $100,000
but less than $1 million, the amount above $100,000 is charged an additional 1.5 per cent.
Properties valued over $1 million are charged two per cent for every dollar over the first $100,000.
This effectively means a property valued $200,000 prior to the new revaluation exercises would have attracted taxes of $2,500 in property taxes per annum. If that property has been revalued to $250,000, that property owner could see his land taxes jump to $3,250 per annum.
However, Oliver Fagan, director of corporate communications at the Ministry of Local Government, which is responsible for the collection of property taxes, said an increase was not yet a done deal, even though talks are under way between the respective ministers of finance and local government on the issue.
"The rates have not yet been raised and you have to understand that a determination to raise property taxes would have to come after consultations between the minister of finance and the minister of local government, so the rates may increase, or they could stay the same, or they could go down," Fagan said.
"That determination can only be made by the ministers and then ratified by the Cabinet, but I can assure you that many considerations will be taken into account before we get to that point."