Minister of Finance Peter Turnquest delivers the Budget Communication. Photo: Terrel W Carey/Tribune staff
BY NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
THE government intends to revert to the previous definition of owner-occupied properties that was in effect up until June of this year, Finance Minister Peter Turnquest said yesterday.
This comes after concerns from affluent Lyford Cay residents were published in The Tribune last week, saying the government’s increased property taxes would drive wealthy second homeowners out of the country and deter new ones.
In a statement, Mr Turnquest noted the government had sought to increase taxes on foreign-owned undeveloped land in The Bahamas, in an effort to discourage land speculation and to encourage development of any such property.
He said the government had also taken steps to improve the tax yield from homes used for commercial purposes by recasting the definition of “owner-occupied” properties and by imposing value added tax on vacation home rentals.
“After consultation with a range of stakeholders from a number of islands and across a number of industries which depend upon the second home market for their viability, the government has determined that it intends to revert to the previous definition of owner-occupied properties that was in effect up until June of this year. The government will give effect to this by amendment to the legislation once Parliament resumes following the summer break,” Mr Turnquest stated.
He noted that both the increased tax on undeveloped property and the imposition of VAT on vacation home rentals will remain.
“By virtue of this, the same category of persons who qualified for the ‘owner occupied’ property designation prior to the recent changes will continue to be qualified as same. They will be eligible for the $50,000 cap on real property tax payments – the cap on such payments that was reinstated by the previous administration in 2013,” Mr Turnquest stated.
“The government continues to encourage the development of the second home market, being fully cognisant of its contribution to a number of Bahamian communities, especially in the Family Islands.
“The government also expects those persons who use their properties to generate commercial rental income to be subject to VAT and contribute to the public purse as do commercial operators in other segments of the hospitality industry,” he added.
The formal announcement on the matter comes after serious concerns were expressed within the local real estate sector and calls were made for the government to clarify the real property tax hikes stemming from the changed “owner-occupied property” definition.
The term “owner-occupied property” had been altered to remove the phrase “or seasonal basis,” instead inserting a requirement that an owner must reside in their property for at least six months annually to qualify under this definition.
The Bahamas’ second homeowner community, many of whom are in this nation for just a few months per year, ultimately fell out of the “owner-occupied” category and lower tax rates that were reduced in 2016.
And, besides the higher tax rate, which the government had doubled from 1 percent to 2 percent on the property value above $500,000, they were also set to lose the $50,000 “cap” that set the ceiling, or limit, on how much they pay annually to the Public Treasury.
Those concerns were outlined in a letter by the Lyford Cay Property Owners Association, which warned Mr Turnquest that the “insensitive and irrational changes” to the Real Property Tax Act’s “owner-occupied” definition were starting to undermine confidence among the very high-end North American investors this nation wants to attract.
In a July 30 letter, the association’s chairman Henry Cabot Lodge III said tax rates that were “too high and unpredictable” would lead to consequences impacting “every sector of the economy that services Lyford Cay”, as existing homeowners sought to exit and new buyers were deterred.
Comments
SP 5 years, 8 months ago
The country is broke, deep in debt with no solution in sight so these jackasses are trying to tax us out of debt!
Why not pull your heads out of your asses for once and focus on using cannabis as a means to quickly boost the economy as at least a starting point down the road to recovery?
Well_mudda_take_sic 5 years, 8 months ago
Why don't you pack your bags and move to Jamaica where you can blow what's left of your mind away.
SP 5 years, 8 months ago
Ignorant neanderthal thinking. 30 U.S. States and 30 Countries around the world profiting billions from medical cannabis legalization with not a single report of "blown minds" and all you monkeys see is Jamaica?
https://medicalmarijuana.procon.org/v...">https://medicalmarijuana.procon.org/v...
https://www.thrillist.com/vice/30-pla...">https://www.thrillist.com/vice/30-pla...
No surprise Haitians have taken over the country. For such a small country, there sure are a lot of assholes here!
Islangal1 5 years, 8 months ago
Save your breath SP! There are those who are still sleepwalking in 2018. The UK just recently legalized weed. I keep saying there are too many countries The Bahamas can learn from to still be doing the foolishness of Trial and Error. The Cayman Islands nearly taxed themselves out of existence, where many businesses closed down and the expat community dwindled, same thing the government trying to do back home it seems. Like you said 30 US States and 30 and countries around the world are legalizing weed to generate income.
Well_mudda_take_sic 5 years, 8 months ago
And the plutocrats who are hell bent on establishing a New World Order - One Global Government - want all of you idiots to simply blow your brains away smoking weed so that they can more easily control every aspect of your pitiful lives!
Well_mudda_take_sic 5 years, 8 months ago
Lame brained Minnis needs to grow a pair and promote the passage of legislation that would prospectively limit direct and indirect ownership of land anywhere in the Bahamas by a foreign person to a maximum of two acres save for land to be developed and/or used for an industrial or other commercial purpose that would be of an obvious benefit to the Bahamas in terms of creating significant good paying job opportunities for many Bahamians.
Well_mudda_take_sic 5 years, 8 months ago
And by the way, I would have thought the wealthy residents of Lyford Cay, Albany and Old Fort would be much more concerned about the very dangerous and environmentally harmful impacts of the massive LNG bunkering, refueling and transshipment facilities that our government is proposing to allow Shell North America to build in very close proximity to their residential properties. This would be a monstrous industrial complex that authorities all along the eastern seaboard of the U.S. have refused to allow Shell North America to build for safety and environmental reasons. Once this Shell North America complex is built on the Western side of New Providence Island, the nearby wealthy foreigners living in their gated communities will not have to worry about property tax at all because the value of their properties will quickly plummet and become essentially worthless.
DDK 5 years, 8 months ago
We have lost untold revenue from the removal of the hotel tax on second home owners renting their properties to tourists. Trust Mr. Turnquest and the PM will right this wrong just as quickly as they shoved VAT Round Two down our collective Bahamian throats. While the House takes a holiday, so do many thousands of vacationers in second home owners' abodes. Meanwhile the average Bahamian continues to struggle because The Government cannot pay its huge borrowing and spending spree debts.
TalRussell 5 years, 8 months ago
Ma Comrades, just in case you wish pay less than your neighbours and fellow citizens - just go hire some affluent foreigner residing behind security gates and moats - wrotes compassionate letter KP and Minnis, on your behalf. { And, some you thoughts I been makin up such kinds outrageous Imperial red shirts since 10th May, 2017 }. Still, KP and Minnis claims has big-time financial troubles when it comes paying schools Lunch Vendors?
John 5 years, 8 months ago
And just a few weeks after D’Aguliar said the government wouldn’t even consider a reversal on the Web shop tax increases. What political punks!
BahamasForBahamians 5 years, 8 months ago
Lol Bahamians complained and even protested.. No results!
Non-Bahamians send one letter - automatic public response and reaction!..
When they said its the peoples time... we now know who people.
birdiestrachan 5 years, 8 months ago
Turnquest and doc are masterful liars. When they were told to jump, they said how high these people may be folks who give undisclosed amounts to the FNM Party
The short fall will have to be made up. so the poor will be taxed more. it is good for the peoples time voters even if I hurt also
TalRussell 5 years, 8 months ago
Whilst Comrade Minister KP is dishing tax welfare for the much richer at same time as the school Lunch Vendors have gone unpaid - just maybe KP will release how much public purse's monies have colony of islands Diplomats dished out buy Wine, automobiles, office furnishings and fine glassware and dinnerware - and for their Personal Travel, out pocket, clothing and entertainment expenses ..... and what monies have been spent on their families travels and other needs.... since I'm told in total just since 10 May, 2017 that it all exceeds $20 million? { You'd think KP owes it much promised Transparency to jump answer all above }. Oh, one more for KP. What about $$$ value the GIFTS your Diplomats have bought give out others...can peoplepublic be provided list names the recipients and $$$$ values each gift?
proudloudandfnm 5 years, 8 months ago
Will these dudes ever not be on a damned learning curve? When will they hit their stride? 2022? WTH???? Amateurs...
John 5 years, 8 months ago
And while they claimed to have removed customs duties on clothing and shoes, only the big, affluent stores can benefit. The small and struggling stores that are behind on their taxes, still have to pay customs duties on these items. So now they have an even more difficult time trying to stay in business and catching up with their taxes. Innis has launched blatant attacks on Lower income Bahamians and local businesses as no government has ever done. It is clear discrimination.
John 5 years, 8 months ago
But when the foreign boaters complained about the $100 cruising permit, it was adjusted. But more than half the boats coming from the US to the Bahamas to fish do not get a permit anyway. And guess what? There’s usually no one to check them. And they come over weekend after weekend and take thousands of dollars in fish and shell fish, without spending a dime for it and the only thing they spend in the Bahamas is on fuel to get back home. And there is no limit )at least none enforced) on the amount of sea catch they can take when they leave.
akbar 5 years, 8 months ago
The white man/foreigner snaps the FNM bootlickers jump. SMH. They only "resolved" when applying pressure to Bahamians.
Peace and God is Great
Dawes 5 years, 8 months ago
Ha ha this is the perfect story to keep Bahamians afraid, its got the rich, the white and the foreigners all in one. At the end of the day if the house is only occupied by the owner for 1 day of the year and otherwise vacant then it is owner occupied. If they live in it for 364 days of the year and rent it out for 1 day it is a commercial house. They should therefore tax the owner occupied at 1% and the commercial at the 2% rate they said. As to the cap of $50,000, at 1% that is for a $5 million house, don't think there is much more over that, but if so then increase the cap to $75,000 this year and say this cap will increase every 2 years by X amount (be it a $ figure or inflation). Whatever you do, do not go in guns blazing only to realise you are shooting blanks and then change your mind as the Government has done. As that only makes the country look stupid.
DWW 5 years, 8 months ago
https://www.bloomberg.com/news/articl...">https://www.bloomberg.com/news/articl...
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