The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Real estate sales for January 2015 were down “significantly” compared to last year following a pre-Value-Added Tax (VAT) high in December, according to the Bahamas Real Estate Association’s (BREA) president.

“We haven’t gone through the first quarter yet, but certainly the month of January compared to last year is significantly lower. A lot of that I attribute to the fact that if you look at December of last year versus December the previous year, December of last year was significantly higher than the year before in terms of sales volume and the amount of closings, and that is because of VAT,” Carla Sweeting told Tribune Business.

“We had attorneys working right up to December 31 to close transactions so that their clients wouldn’t incur VAT. I think it’s still too early to tell what the amount of impact is. Has it slowed down? Absolutely, and there are still a lot of people wondering whether they should hold out and see if the Government does anything with the Stamp Tax.

“But the other things is that Scotiabank has a remortgage plan that is keeping our appraisers very busy, because people are having to appraise all of those properties to see if they qualify for the offering.”

Ms Sweeting added: “New sales are down because it’s just so hard for people to qualify for mortgages today. I wouldn’t be able to say to what extent just yet, whether it is because of VAT, or because of a combination of VAT and people struggling to qualify.”

The BREA president said the high-end Bahamian real estate market does not appear to have been impacted as much, although a decline in high-end property costs has helped generate sales.

Ms Sweeting said the industry has heard of no immediate moves by the Government to replace Stamp Duty on real estate transactions with VAT, and any such developments would be announced in the upcoming 2014-2015 Budget. However, she views any Stamp Duty replacement as unlikely.

“The Stamp Duty impacts the Budget,” she told Tribune Business. “We contribute a lot of money to the Treasury every year from Stamp Tax. I would be surprised if they made a decision before the Budget came out. I’m expecting that if nothing is said in the Budget then nothing will be done. I don’t want to push that issue. It is what it is. The VAT hurts, especially first timers who are struggling, but I think I would not push that until after I see what happens with the Budget.”