100% hike in some housing ministry fees
There is to be a 100 per cent increase in some fees for sale of properties owned by the Ministry of Transport, Works and Housing as the ministry seeks to get additional money in its coffers.
The Portia Simpson Miller-chaired Cabinet approved the increase at its September 22 meeting, and later tabled a ministry paper in Parliament indicating that there would be increased processing and legal fees for commercial transactions.
Increased fees will also apply for the processing of residential transactions; and for the addition of names to a sales agreement after it has been signed and sealed.
There will be a reduction in interest rates, with the Cabinet approving the linkage of the interest rates to treasury bills rate. The regime will be reviewed biennially.
Responding to questions from The Sunday Gleaner, the housing ministry said a processing fee of $5,000 is to be instituted as well as legal fees for commercial transactions of three per cent of the property value with a minimum of $20,000.
The ministry said the revenue that is realised from the fees for commercial transactions is dependent on the number of transactions that the ministry enters into and the value of the properties.
For the 2015-16 financial year, it is projected that the ministry will sell 15 commercial properties with a combined estimated value of $96.3 million.
"If realised, these sales should yield approximately $75,000 in processing fees and $2.9 million in legal fees," the ministry said.
"It must be noted that this projection applies only to those transactions that are initiated by the ministry and does not include those transactions that will be initiated during the course of the financial year by individuals or entities, which cannot be predicted."
RESIDENTIAL FEE INCREASE
Meanwhile, under the new rate regime, the processing fee for residential transaction will move from $1,000 to $2,000.
The ministry is projecting that for the 2015-16 financial year, 503 residential properties will be sold which, if realised, should result in just over $1 million in processing fees being collected.
The cost for addition of names to a sales agreement is to move from $2,000 per name to $4,000 per name.
Interest rates will be lowered from 15 per cent and 18 per cent to nine per cent and 10 per cent for residential and commercial properties respectively.
The housing ministry has accepted that there will be a loss in revenue from this measure. However, it says the loss cannot be calculated with any meaningful level of accuracy because interest is a penalty for accounts in arrears and is only applied on the outstanding balance where accounts are not closed within the stipulated time frame.