Make use of the opportunities – Charles

Minister with responsibility for water, housing and infrastructure, Senator Pearnel Charles Jr, has challenged realtors to make use of the opportunities created through the raft of tax reductions and housing benefits implemented by the government recently to further propel the growth of the industry.

Addressing stakeholders at a Realtors’ Association of Jamaica (RAJ) symposium held in partnership with JN Bank at the Montego Bay Convention Centre in St James last weekend, Charles pointed out that the real-estate market is poised to grow.

According to data from the Statistical Institute of Jamaica (STATIN), employment in the real-estate renting sector grew by 7,800 jobs between April 2018 and January 2019, or about nine per cent, while construction, to which real estate is linked genetically, added 1,000 jobs during the same period. Together, the sectors are responsible for about 16 per cent of employment, second only to tourism.

“A couple of years ago, you would often hear that the government is obstructing the industry from being successful, but now, the government is not only moving aside, we are setting the target for you to run as fast as you can,” he told realtors.

He said that government was committed to facilitating the growth of the real-estate sector and outlined several initiatives to drive growth, including the introduction of inter-generational mortgages through the National Housing Trust (NHT) and a guaranteed purchase programme for developers, as well as an increase in the limit of construction loans provided by the NHT, among other measures.

These are separate from the recently announced reduction in stamp duties and transfer taxes, reduction in interest rates by the NHT, and increase in the loan sum available to applicants.

“What is happening is a raft of measures that has never been seen in this region, and so I am excited to hear how the realtors will respond to this,” he said.

He pointed out that the market is particularly in favour of young professionals, who now have a better opportunity to purchase property.

“Before, you would have to burden your clients by saying to them: ‘You’re going to pay me, you’re going to pay the lawyer, then you’re going to have to pay the government five per cent for transfer tax and together, another four per cent’. Most young professionals, when they hear this, would say: ‘See you when I see you!’ because they can’t afford it,” he related.

Transfer taxes have been reduced from five per cent to two per cent, which means that the up-front deposit usually charged by vendors to cover these costs can be lowered, and stamp duty is now a flat fee of $5,000, down from four per cent split equally among the vendor and purchaser.

“Our responsibility is to try and stimulate business – not to try and take over, but to create an environment for you to grow and to thrive,” he told realtors and stakeholders.

Beyond those measures, the senator noted that several housing projects have been undertaken by both the government and the private sector to meet demand. The NHT has projected 8,640 housing starts and 4,714 housing completions for the financial year, the minister disclosed. The Housing Agency of Jamaica will also introduce 3,602 housing starts and has commenced planning for five other projects, which will provide an additional 1,750 units.