By RASHAD ROLLE
Tribune Staff Reporter
LOTS in Sunset Close and Fox Hill worth $30,000 or less will officially go on sale in June or July, Prime Minister Dr Hubert Minnis announced yesterday, adding that the lots will be available only to police officers, immigration officers, customs officers, defence force officers, prison officers, teachers and nurses in the first wave.
His statement came as parliamentarians debated the Access to Affordable Homes Bill, which would grant people not only land at reduced costs but also customs and excise duty exemptions on construction materials that are necessary for building the homes in government-owned subdivisions.
Under the programme, potential homeowners will be given two years to construct their home.
Dr Minnis said the average lot to be sold for $30,000 or less is valued at $100,000.
“Certain material for homebuilding will be duty free, which may save homeowners approximately an additional $30,000 to $40,000,” he said.
Dr Minnis said similar benefits will be given to Bahamians in the Family Islands next year looking to establish bed and breakfast businesses.
“We recognise that what’s happening today,” he said. “Foreign individuals are building second homes in our Family Islands and they are using those homes as bed and breakfast or room inventory and if the government does not take control of this matter now, ten, 20 years from today Bahamians will lose their Family Islands and tourism industry. The legislation to be brought sometime next year, the commercial component, will allow Bahamians to purchase land for bed and breakfast at reduced costs with all the infrastructure in place and they will be able to build again duty free.”
Dr Minnis said such businesses which sell only “Bahamian products as breakfast” will receive further perks.
“What is most important about the legislation that will come is that we understand that bed and breakfast means that you’re selling breakfast as part of your package,” he said. “If a bed and breakfast facility sells only Bahamian products as breakfast they will be incentivised again...We also recognise that as business starts to grow, those individuals will possibly ask for facilities as they may want to now provide lunch in addition to breakfast. In such a situation such as these, they will be further incentivised.
“However, if one non-Bahamian item appears on your breakfast or lunch menu then you will lose your incentives,” Dr Minnis said.
Deputy Prime Minister and Minister of Finance Peter Turnquest stressed that despite the affordable housing programme, the government is careful not to distort the construction and real estate industries by making the benefits available outside government designated subdivisions.
“We are mindful that we also have to protect the Treasury,” he said, addressing critics wondering why exemptions under the programme won’t be given generally to people building homes in the Bahamas.
“We cannot afford wholesale elimination of duties and excise taxes across the board, otherwise we will have chaos,” he said. “So this is very targeted, intended to assist the most vulnerable, those families who are deserving, who are qualified to access affordable homes.”
Critics are concerned that under the bill, the minister of finance is solely empowered to approve applications of people seeking tax exemption benefits.
Matt Albury, chairman of the Organisation for Responsible Governance, said such a provision concerns him.
“The tendency of legislation to give ministers power of approvals is contrary to transparency and increases the potential for political favoritism,” he told The Tribune yesterday. “The terms and process needs to be crystal clear and independent of the political process. From an efficiency perspective, we have seen repeatedly that having a commission or board make decisions can streamline efforts like this. Although this is only for 300 lots in the first wave, having ministry approval would not seem sustainable in any expansion of this programme.”
Similarly, Exuma and Ragged Island MP Chester Cooper, during his contribution yesterday, said: “Why risk a politician holding something so important as this in hand and making him the sole arbiter of who is approved? Many Bahamians already live in fear of being victimised by this government.”
Mr Turnquest in turn said only the Minister of Finance has the statutory power to grant tax exemptions. He also said the bill mandates that the minister tell applicants in writing why their request was refused.
“The bill specifically anticipates that some minister may in the future, because it won’t be this one, decide that he wants to be spiteful or political or vindictive or whatever and the Act requires that minister to outline in writing why he would’ve denied such an exemption. And it could go to judicial review at the end of the day if you’re not satisfied,” Mr Turnquest said.
Mr Cooper said whatever the law’s intent, it has “fantastical” aims “when it comes to its practical application.”
“Most people can’t qualify for the $100,000 or so a local bank would facilitate for building a home especially after having to qualify for the lot,” he said. “…The lot is $30,000, the house will be, let’s say 1,000 square feet at, oh, low balling $100 per square foot for what a private contractor would charge, so we have a nice round number. That’s $130,000 for a house and the land. How many Bahamians can realistically afford that on their own through a financial institution? Now, if you say the intention is to facilitate these loans through an entity like the Bahamas Mortgage Corporation, then that makes more sense.”
Nonetheless, Housing Minister Brensil Rolle said through the law, Bahamians will be “reasonably” able to get a house for $100,000.
Otherwise, he said the cost of government homes obtained through the Ministry of Housing has been growing, increasing from $120,000 in 2012 to $160,000 five years later.