The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday said to be “very receptive” to proposals for ‘pre-approving’ first-time home buyers for the Stamp Duty exemption, and already moving to ensure all parties understood how the incentive was to be applied.

Reaffirming that the ‘per-approval’ plan had the potential to “significantly reduce” transaction costs for first-time buyers, Franon Wilson, the Bahamas Real Estate Association’s (BREA) president, said the Ministry of Finance appeared “committed” to aiding the industry.

Speaking on his meeting with Michael Halkitis, minister of state for finance, Mr Wilson told Tribune Business: “It turns out that a lot of the issues members of BREA have been experiencing seem to be different people interpreting different parts of the Act differently.

“Some people may look at it one way, some people the next way. The Ministry will be taking steps via a statement to ensure all parties, including the public, know what the policies are to ensure everyone is singing from the same hymn book.”

Apart from clarity and consistency over the Stamp Duty exemption’s application, and its understanding by all sides, Mr Wilson added that Mr Halkitis was “very receptive” to proposals that first-time buyers be pre-approved for the exemption prior to entering into the transaction to buy their home.

This, the BREA chief added, would give them the option of seeking pre-approval once they had been approved for financing by their lender, or, if they didn’t, first-time buyers could still place funds to cover the Stamp Duty into an escrow account.

The pre-approval, Mr Wilson said, would enable first-time buyers to avoid having to raise extra financing to cover the Stamp Duty - something which many ultimately could not do, breaking transactions and driving persons out of the market.

“The amount of money someone needs to come up with to get their own home will be significantly reduced,” Mr Wilson told Tribune Business.

“This is significant. One of the main challenges to owning a home is the amount of money you have to come up with - 5 per cent downpayment, legal fees, bank fees and other closing costs.

“Having to raise another $10,000-$20,000 is significant. We’ve just moved the goalposts a lot closer.”

To put the pre-approval plan into effect, Mr Wilson said Mr Halkitis had to speak to all the government departments dealing with the first-time buyer Stamp Duty exemption to see how it could work, and whether there were any concerns/obstacles.

“Provided that is positive, it seems like something that could happen very quickly,” Mr Wilson said.

He added that the Government’s Stamp Duty Exemption Unit had been turning applications around in two weeks or less, ensuring there was “no hold up” on any transaction.