Cash-strapped Bermuda, which is in a four-year recession with a national debt of $1.4 billion, is increasing land taxes on wealthy homeowners.

Under legislation approved by the House of Assembly, the Land Tax Amendment Act increases taxes for properties with an annual rental value of between US$90,001 and $110,000 from 9.6 per cent to 19.2 per cent.

Taxes on properties with an annual rental value of more than $120,001 will rise from 19.2 per cent to 23 per cent.

Land taxes on all other properties will remain unchanged.

The increase comes into effect on July 1.

Finance Minister Bob Richards said the legislation would only affect a small percentage of homeowners and raise millions in revenue for the government.

This is fair. Those who live in the most expensive homes should pay more land tax than others, he said.

Shadow Finance Minister David Burt said he was pleasantly surprised, saying there were a few more places to look in order to find similarly progressive revenue sources, to which Richards replied hope springs eternal.

CMC