Fri | Jan 28, 2022


Constant Spring Golf Club gets property arrears slashed by $13m, seeks larger chop

Published:Sunday | April 25, 2021 | 12:35 AM

The Constant Spring Golf Club (CSGC) had its $22 million in property tax arrears slashed by more than half after it was hauled before the courts by Jamaica’s tax authorities, a Sunday Gleaner investigation has revealed. The arrears span a seven-...

The Constant Spring Golf Club (CSGC) had its $22 million in property tax arrears slashed by more than half after it was hauled before the courts by Jamaica’s tax authorities, a Sunday Gleaner investigation has revealed.

The arrears span a seven-year period ending in 2017, when the exclusive members-only golf club failed to pay its entire property tax bill, along with penalties and interests assessed by Tax Administration Jamaica (TAJ), documents and government insiders have revealed.

The tax break, totalling $12.9 million, was granted based on a decision by the Land Taxation Relief Board, administrators of the Land Taxation (Relief) Act, following an appeal by the operators of CSGC, according to documents obtained by The Sunday Gleaner.

“The Land Taxation Relief Board advises that: In accordance with provisions set out under Section 7 of the Land Taxation (Relief) Act, the land tax payable in respect of the subject properties shall be determined as follows,” the board said in its decision.

“By applying the rate of tax applicable upon 50% of the unimproved value of the subject properties, as recorded on the 2017 valuation rolls, that is to say, $210,000,000.00 and $4,000,000,000.00, respectively,” the board ordered.

The basis for the board’s decision and the date it was made are unclear, but the order makes it clear that the resulting relief certificates issued to CSGC “will have retrospective effect from April 1, 2017”.

“And unless revoked in accordance with the Act [will] continue in force until a new valuation roll (or a change in the valuation roll) comes into force dealing with the lands to which the relief certificates relate,” the board ordered.

Nearly two months before the board’s decision, TAJ had filed documents for CSGC to appear in the civil division of the Corporate Area Parish Court on two summonses, each claiming that the club owed $11.2 million in property taxes, including penalties and interest charges.

Clive Nicholas, chairman of the Land Taxation Relief Board and former director general of TAJ, declined an interview when questioned about the basis for the decision.

He requested, during a telephone conversation last Friday, that the questions be put in writing and delivered to the board’s East Street offices in downtown Kingston “and we will respond”.

Since 1920, CSGC, located on Constant Spring Road in St Andrew, has occupied 128 acres of green space lands owned by the Government under a lease agreement that requires the operators to pay all property taxes and ensure the proper maintenance of the property.

Still, CSGC, apparently dissatisfied with the amount of tax break granted by the board, appealed to Finance Minister Dr Nigel Clarke for a review of the decision. The application was made “about the end of 2018”, according to government sources.

The finance minister is empowered, under Section 9 of the Land Taxation (Relief) Act, to consider appeals regarding decisions made by the board and to “make such order in relation to such appeal as the minister may think fit”.

The appeal to Clarke, CSGC explained, was made because the 50 per cent waiver granted by the board was “unsustainable, having regard to the CSGC’s specific circumstances”.

“Having regard to the increases in the unimproved value of the land, the 50 per cent rate of waiver amounts to an annual property tax assessment of approximately $4.6 million and an overall outstanding indebtedness to the Government on account of property taxes … in the sum of approximately $28 million,” said CSGC General Manager Kirwin Tucker.


He said based on the club’s finances, the 50 per cent rate of waiver imposes significant hardship and threatens the closure of CSGC’s operations.

But one source, who requested anonymity, disclosed that the finance ministry frowned at CSGC’s appeal, quietly expressing the view that the case did not warrant any further consideration beyond the board’s ruling.

“The minister is guided by the same principles as the board regarding the broad headings under which relief can be granted,” one source explained.

With Clarke still to publicly communicate his decision on the matter, the case filed against CSGC by TAJ was heard in court on March 22 this year. Then Parish Judge Tracy-Ann Robinson ordered the golf club to pay $4.9 million on one of the summonses and $4.6 million on the other, the differences reflecting the $12.9 million write-off granted by the board.

Robinson ordered, too, that CSGC be allowed to make the payments over 36 months and that its 10 directors should serve 15 days in prison if the payments are not made.

CSGC, through its attorneys, has already filed papers in the Court of Appeal challenging Robinson’s order.

“From the start, they had no intention to pay,” charged one government insider, who disclosed that CSGC also owes millions of dollars in property taxes for the years 2018, 2019 and 2020.

CSGC, however, defended its decision to request the tax break, disclosing that it spends approximately $70 million each year to maintain the green space and golf course.

Tucker indicated, too, that the club is a non-profit entity and an “approved organisation” that qualifies for a waiver or property tax relief under both the Property Tax Act and the Land Taxation (Relief) Act.


He disclosed that in 2017, the then executive committee became aware of the increased unimproved value of the land and the significantly increased property tax assessments.

This, he said, prompted them to reapply to the Land Tax Relief Board for waiver of the recently increased assessments, but by his account, it was not “until October 2019 that the Land Tax Relief Board granted waiver at the rate of 50 per cent”.

“For over 90 years of its existence, the CSGC’s operational circumstances have justified the grant of a minimum 90 per cent waiver of the property tax assessed on the unimproved value of the land it maintains,” Tucker said in an email to The Sunday Gleaner yesterday.

Clarke declined to comment for this story, citing the pending the Court of Appeal hearing.

However, a legal opinion drafted by TAJ’s legal unit after the write-off was granted has raised doubts about whether the exclusive members-only club was entitled to it either under the Property Tax Act, the Charities Act or the Land Relief Act.

It noted that Section 10 (l) of the Property Tax Act would be the clause applicable to CSGC. That clause indicates that “all buildings and lands belonging to any social, cultural organisations approved by the minister [of finance] and used solely for the purpose of that organisation”.

While noting that there is no definition in the legislation for a ‘social organisation’, the opinion said a perusal of CSGC’s memorandum of association shows that its “clear focus is the promotion of golf and other athletic sports and pastimes”.

It indicated, also, that this clause in the legislation focuses on institutions whose core functions centres on education, health and other charitable causes aimed at serving the country and provide “general benefits to the society”.

“The membership of the CSGC, however, is restricted and limited by the cost of said membership. The membership fees indicated for varying activities would serve as a deterrent to general or wide membership given the socio-economic realities of Jamaica,” the opinion said.

“The intention of public benefit, which guides the scheme of the exemption section, would therefore not be met by the CSGC.”

Under normal circumstances, the membership fee for access to all amenities at CSGC is $363,000 per year, checks by The Sunday Gleaner revealed. However, because of an ongoing ‘special’, that figure now stands at $207,000.

Other smaller packages include an annual $25,000 fee for use of CSGC’s jogging trails and an annual $50,000 fee to play golf “with reduced green fees”.

While conceding that an argument can be made that the club is a ‘charitable organisation’ as defined in the Charities Act, the opinion indicated that the purpose that would have to be satisfied is the advancement of amateur sports.

“We have been advised that CSGC is the home of junior golf; however, their activities are ancillary to the principal work of the organisation,” the document said, downplaying possible use of the Charities Act as the vehicle for CSGC’s exemption.

The Land Taxation (Relief) Act outlines the scheme by which individuals with special circumstances can seek relief from property tax under the broad headings of agricultural, statutory and special discretionary relief.

Statutory relief may be granted in circumstances where the valuation of lands, based on the potential use, is greater than the current use while discretionary relief generally applies to persons with disabilities and pensioners, among other marginalised groups.

While acknowledging that the board has responsibility for the granting of exemptions, TAJ legal minds opined that “there is little evidence that CSGC would meet the criteria for exemption under this legislation”.

Seeking to explain its property tax delinquency, CSGC said since the increased assessments, it has sought to garner more revenues by increasing membership fees.

However, the general manager said this has resulted in decreased membership and loss of revenue.

“The CSGC has, nonetheless, sought to restructure its business operations to facilitate increased revenue,” Tucker said.

He indicated, also, that the restructuring process has been impeded by the coronavirus pandemic and the associated restrictions on gathering and operational hours, which has caused a decline in business activity.