VISITORS to Nassau ride through the historic city wide-eyed, awed by the lines and bones of its architectural heritage and appalled at the number of buildings with holes in the roof or no roof at all, decorated with unsightly graffiti and begging for attention. Years ago, there was a list of such buildings. Dubbed the Dirty Dozen, it shone a light on the buildings that brought nearby property values down and for which Bahamians who took pride in their capital found themselves constantly apologizing and trying to explain why they were left to stand in the heart of a thriving metropolitan and financial services mecca.
The reason dilapidated buildings remain in our midst is unacceptable – tax policy favours the unkempt and inadvertently leads to the proliferation of eyesores. Why? Because the worse condition the building is, short of structurally unsound, the lower its value. The lower the value, the less Real Property Tax its owner or owners will have to pay.
That is a serious flaw in an antiquated property tax policy.
It is, in fact, the exact opposite of what a progressive property tax should be, which would be to incentivize property owners to maintain their buildings and contribute to the overall appearance and health of attractive communities.
Property tax is not intended to punish but it most definitely must not be used to reward bad behaviour. It is intended to help raise revenue to provide for the services communities which are taxed need.
In many countries how the tax revenue is allocated is broken down with specifics so the property owner knows what percentage goes to a fire department for fire and emergency services, how much to the library, the school district. Assessments are based on an average of recent sales of comparable properties in the immediate area or, if in a condominium complex, in that very complex if there is enough activity to warrant any change in assessment from the previous year.
In The Bahamas, neither Bahamians nor expat second home owners have any idea how an assessment is reached nor how our tax dollars are spent on our communities. Taxes collected by the Department of Inland Revenue go into the all-encompassing, ad infinitum Consolidated Fund where one thing we do know for certain is that much of it will go to service the national debt. Not pay down the debt, but service it, much of which was incurred also without our knowledge, consent or silent assent. The people we elected to represent us spent it and we pay for it. And those who fail to maintain their properties pay less per square foot than those of us who do. Then there is the further irony of those who pay among the highest rates of real property tax and require the least services from government because they are also paying homeowner fees to an association that looks after the roads, verges, street lighting and private security. If they have school age children, their children are most likely to attend private school.
The time has come to turn the page on Real Property tax, to assess fairly without prejudice against perceived wealth in the Family Islands where individuals and families have expressed every emotion from display to shock at their property tax bills, in some cases valuing land at four times what they just paid for it. The loudest complaints have come from Exuma where real estate brokers have been helping to fight the battle for their clients.
High national debt and desperation for a money grab does not justify penalising those who care for their property. A valuation system must be an open and transparent process enabling those who are being taxed to understand how their property was assessed and providing detailed information about how their tax money is being spent.
In addition, all Real Property Tax bills should be e-mailed unless the property owner otherwise specifies and payment online via credit or debit card should be made as easy as possible. There should be no need to go to the Department of Inland Revenue to request a property tax bill nor to make a payment unless a discussion is required that cannot be conducted via an online chat. Every prime space in a parking lot that was inadequate to begin with is reserved for a staff member and taxpayers fight for the few remaining spots or wait for a car to pull off from a side road makeshift parking spot or an empty lot across the street.
Surely, in 2018 with a government that promised freedom of information, accountability and transparency the time has come to take a far closer look at the Department of Inland Revenue, the assessment process and taxation that incentivises eyesores and fails to reward historic preservation or the upgrade of clean, well-kept, freshly painted and cared for homes, yards and commercial property.