Reform the land transfer system
Jamaica can cut the cost and eliminate the bureaucracy involved in its land transfer process to stimulate the economy, says Earl Jarrett, general manager of Jamaica National Building Society (JNBS).
Jarrett commended the Government on its recent programmes to ensure that the purchase of property is less onerous than before. He was addressing the Land Surveyors Association of Jamaica at The Jamaica Pegasus hotel in New Kingston recently.
"The reduction in the cost of stamp duty and transfer tax has assisted persons who are desirous of obtaining property," he pointed out, "and, we are advocating that this provision be made applicable to all aspects of land transfers, as a means of stimulating the economy."
Jamaica has one of the highest costs for land transfers, he stated. "That cost slows down land transaction processing and the ability of owners to develop their lands."
Many people are overwhelmed in making a decision to buy or sell a property, and sometimes they stall or even abandon the process, or take short cuts to their own detriment. He pointed out: "We need to review the process, and implement changes starting with a reduction in land transaction costs."
Jarrett told the land surveyors that that was of critical concern in the current financial crisis where the Government lacked the "fiscal space" to stimulate the real estate sector. He added that changing property transaction fees from a percentage base to a flat rate would reduce transfer costs and stimulate the economy.
Jarrett said land was collateral that could be used to spur financial and economic growth . He declared that much of the land in Jamaica was 'dead capital'. However, as the lack of a comprehensive property registration system excluded a significant number of properties from the formal economy.
"Efforts to purchase real estate or even to bring existing property into the formal system are often frustrated by the many steps and financial hurdles that exist," he said. The property transaction processes can sometimes take up to a year, and involve several stakeholders, with their own timelines and costs.
The general manager said proper land surveying and the clear identification of ownership was important, because in many families land is often passed down from one generation to the next, and subdivided for family members, without individual members obtaining proper titles for the lots.
"Land is one of the most effective tools for development if properly utilised," he said. "If we can get these parcels of land properly registered and placed into productive activity, such as farming, creating tourism attractions, and building housing - it is unimaginable how much growth this country could experience."