Evaluations to begin for implementation of property tax
Notices of assessment are expected to be sent out in about two weeks’ time to the owners and occupiers of properties.
Speaking at the Post Cabinet media briefing on Thursday Finance Minister Colm Imbert said this is the first step in initiating the collection of property tax, which will be carried out in accordance with the Property Tax Act.
Based on the annual rental value of a property, Imbert said this should not be confused with the property’s capital value.
“I have seen on numerous occasions, this error being made, where persons take the actual capital value of a property…and multiply that value by three percent, which is the figure in the legislation and then arrive at a notional property tax and scare everybody.”
“The tax is based on the rental value, so that after the annual rental value is determined based on a formula, and based on reasonableness as well.”
“So if you take a typical property renting for $5000 a month, the annual rental value would be $60,000. That is then reduced by 10 percent…so then it would be reduced to $54,000 and then you multiply that by three percent and you would get a little over $1500 per year…So that works out at maybe $120 to $130 per month for a typical house.”
Due to the enormity of the task in ensuring that each property is evaluated, the Evaluation Division of the Finance Ministry will hire 248 new staff to complete the exercise. The Minister said advertisements are now closed, with over 2000 applications for those positions having already been received.
Asked about the timeframe within which the property tax would be operationalised, Imbert gave a hopeful estimate of 12 months for each property to be recorded.
The Minister said information on the implementation and application of the property tax would be disseminated to the public in the coming months.
See also: VIDEO: Property Tax decoded