By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
THE Deputy Prime Minister has pledged to review the property tax valuation system's accuracy, while warning Bahamians and residents: "Don't bully the taxman."
K P Turnquest told Tribune Business that aggrieved taxpayers needed to use the appeals process available to them, instead of seeking to pressure the Department of Inland Revenue by running to politicians or the media with their grievances.
Responding to complaints of "crazy" real property tax valuations and billings on Abaco and Exuma, with some increasing by as much as eight-fold, Mr Turnquest warned taxpayers that "we get ourselves into trouble" by asking politicians to intervene on their behalf and bypass the system.
He reiterated that the Government had an obligation to collect what was due to the Public Treasury without imposing an unfair burden on property owners, and said it was "not our intention" to cause shocks to the system. And, as a result of recent complaints, Mr Turnquest promised that the Government would examine the 'fairness' of its real property tax valuation methods to ensure equity for all concerned.
He conceded that the valuation system was still "catching up" with changing market conditions, citing Abaco and Exuma as two islands in particular where market values had increased in recent years.
"Both of those areas, interestingly enough, have increased significantly in value, as they all do," Mr Turnquest told Tribune Business. "What we are finding here is that the system is kind of catching up.
"We are going to have to look at that to ensure we don't cause significant shocks to the entire system. It's not our intent. By the same token, we have an obligation to collect taxes due to the Government.
"We are going to look at the entire system to make sure the valuation methodology is fair to all concerned, and up to date. At the end of the day, nobody wants to pay more taxes than they have to, and nor should they have to. But we have the responsibility to collect taxes that are due in as fair and objective a manner as we possibly can."
Exuma became the latest island to complain about real property tax billings, with realtors on the island last week warning that increases up to eight times' greater than market value were threatening to "kill" the island's second home economy.
Collingwood 'Woody' Turnquest, an Exuma-based broker with Coldwell Banker Lightbourn Realty, told Tribune Business: "Just this week, in the last five days, I had two incidents. One of the properties was an inland lot worth a maximum of $10,000, but real property tax assessed it at $82,000-plus.
"Another lot I'm selling, I had it listed at $30,000, and they assessed it at $137,000. That pushes it up to the 10 per cent Stamp Tax bracket, and when you put 10 per cent on $137,000, that's almost $14,000.
"When the guy who's going to sell it has to pay my commission, almost $14,000 in Stamp Tax and legal fees, to him it's almost worth nothing. He's not going to sell it. By bumping the assessed value above $100,000, the Stamp Tax rate goes from 2.5 per cent to 10 per cent, and that blows the deal straight out of the water."
Mr Turnquest, though, urged aggrieved taxpayers to use the established appeals process to challenge any tax billings and/or valuations they believe unfair. That, in the first instance, involves hiring an appraiser to assess the property's value, then supplying a copy of that report to the Department of Inland Revenue to challenge its valuation.
Should the Department prove unyielding, the Deputy Prime Minister said taxpayers have further recourse to the Tax Tribunal and, should they still not be satisfied, to the Bahamian court system. He added that all matters were dealt with on a "case-by-case basis", and where valuations/billings were found to be incorrect the Department will make adjustments.
Mr Turnquest also warned Bahamian and resident taxpayers to cease the age-old practice of calling on their MPs, Cabinet ministers and others to intervene on their behalf when disputes erupted, since this threatened to undermine equity and confidence in the system.
"You can't expect to bully the Tax Department," he told Tribune Business. "Too often people believe they can go to the press and politicians to get them [the Department] to make adjustments.
"That's how we get ourselves in trouble. We want a fair tax system that is predictable. If there are questions, you ought to go to the Tax Department and resolve it with them. If you don't, there's no point to jump from zero to 100 and try and apply pressure.
"Again, this is a necessary part of your responsibility as a citizen, as a resident, so let's make sure we do it fairly and accurately. The Government certainly doesn't want to burden anyone unfairly. That's not our modus operandi."
Mr Turnquest said the Government wants a thriving second home market throughout the Bahamas, and was open to suggestions on how the business climate for the sector could be improved.
"We want a vibrant second home market," he added, "and to the extent that people want to make recommendations or representations as to how the second home market is taxed and operates, we're willing to listen."
Acknowledging complaints that the Department of Inland Revenue ignores taxpayer grievances, Mr Turnquest urged them to follow the process. "A lot of times people have this misconception that they can't complain, or complain that they're not being listened to," he added.
"To the extent they feel the Tax Department is not treating them fairly, they have a right to appeal it upwards through the system to the courts. Where they can't get a response, send a note to the Minister."
Comments
TheMadHatter 6 years, 1 month ago
He says ""We are going to have to look at that to ensure we don't cause significant shocks to..."
Sir, you don't have to "look at" anything. You ARE the Min of Fin. You can make a regulation that no property tax bill be more than double what it was the previous year. Then it would take 3 years to reach 8-fold instead of immediate. That would give "the people" (who's "time" it supposedly is) time to catch up instead of the valuation system being given time.
Which is more important? People? or Valuation System?
You have the power to decide.
DWW 6 years, 1 month ago
tax act allows re assessement no sooner than once every 5 years.
BahamasForBahamians 6 years, 1 month ago
These guys are dismal failures.
DDK 6 years, 1 month ago
They are starting to appear exceedingly greedy! Enough with the taxes. Allow The People to live!
hrysippus 6 years, 1 month ago
The taxman deserves every bit of bullying. He or she is a fiscal parasitic lackey secure in his or her government job living at the expense of every tax paying Bahamian. Constipated petty bureaucrats are the lowest form of social life, right alongside corrupt politicians and predatory pastors.
TalRussell 6 years, 1 month ago
Ma Comrades, rather than dread the day your property assessment arrives from the government - lobby to stop foreigners buying whatever properties they can afford - this diving up property taxes for the locals. Can't enjoy bragging how your house gone up so much in value - then cry poor mouth when KP's tax man's is at your front door seize ya home?. If you like foreigner prosperity so much.... smile and pay KP da money or hand him front door's keys.
bogart 6 years, 1 month ago
Differences in govt valuation assessments from $10,000 to $82,000 plus, and $30,000 to $137,000. ......well...,,,..???? Simply tooooo big to not hit the roof..?
"Too often people believe they can go to the Press and Politicians and get them (the Department) to make adjustments."....."Thats how we get ourselves in trouble......".....free speech censored?....freedom of association...??...these are critical issues of DEMOCRACY at stake. If it was not for the politicians and press we would ......silll be be trying to get commerce restored......we would never get a change of government.....we would hav to put up or shut up..... people would tek bread outta we mouts......if it was not for the politicians...our MPs politivians standing up fer whats right.....dawg would eat we lunch....Incompetant people need to be fired.Of add places govt people need to add and subtract and value PROPERLY !!!!!!!!!!!!!
joeblow 6 years, 1 month ago
This problem would not have arisen if the government had properly thought out the process to ensure fairness. They did not so what do you expect. The government cannot continue to squeeze the shrinking middle class forever it will cause a class war. Home and property owners are penalized with taxes for trying to own a stake in this country while squatters live by another set of rules. A cloud is gathering on the horizon!
DWW 6 years, 1 month ago
probably wouldn't have this situation had they hired a competent experience professional instead of a high school summer student eh what?
Dawes 6 years, 1 month ago
If you were able to lodge complaints to the tax man and be dealt with in a efficient manner people would not feel the need to go to the press or MP's. However as it is, you can make your complaint and then not hear anything except pay. Until this changes people will always go to the press or MP's if that is the only way of getting a response.
bogart 6 years, 1 month ago
...sadly there is noone to complain to about any wrongdoings by govt or its agencies and lawyers will usually claim a conflict on confronting govt or any agency for fear of not receiving a favourable response in the future. MP and the press are a last resort. Added is the small person uusually has no money to launch a legal protest so many poor just walk away. Thankfully there is always the press ......and even so many still do not report it for fear of somebody or their family getting back at you the aggreived for causing 'trouble' or getting themselves into trouble.....read the article.
jackbnimble 6 years, 1 month ago
Somebody at the top of the chain in the Ministry of Finance, either the Minister himself or someone right beneath him has hit the stupid button. All of a sudden, as is overnight, assessments are through the roof and even with an appraisal in hand, they refuse to adjust them.
I get that the Government is strapped for cash, but is there is need to overcharge people? It's as if they are hoping persons won't challenge the system and just pay.
This is no way to operate. You simply don't cut off your nose to spite your face.
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