The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister yesterday unveiled multiple measures designed to boost Bahamian home ownership including an up-to $40,000 refund of VAT paid by first-time buyers on construction services and building materials.

Philip Davis QC, unveiling the 2022-2023 Budget in the House of Assembly, pledged to expand and grant equal incentives to first-time buyers either purchasing an existing home, renovating a property or acquiring land to build their house on.

“For those who are constructing or renovating their first home, we also are refunding up to $40,000 in cash for any VAT paid for construction services or materials purchased once the occupancy certificate is provided within 18 months of the commencement of construction,” he added.

“We are also increasing the level of exemption for first home buyers from $250,000 to $300,000, and reducing VAT on property transfers below $1m for individuals.” Under the VAT Act reforms tabled in the House of Assembly, first-time buyers acquiring a property valued between $300,000 and $500,000 will pay a VAT rate of just 4 percent.

The Government is also introducing a tiered scale for VAT payable on property transactions below $1m. While persons buying property valued at less than $100,000 will still pay the current 2.5 percent VAT rate on the sale/purchase, those acquiring at a price between $100,000 and $300,000 will now pay 4 percent.

Non-first time buyers will face a 6 percent VAT rate where the property value falls between $300,000 and $500,000, and 8 percent between $500,000 and $700,000. Properties valued at between $700,000 and $1m will attract 9 percent.

“We are also eliminating VAT on property transfers between joint tenants of property. This is especially important to Bahamians who have inherited land jointly with siblings. We have also simplified the rules around transfers of property with similar but not identical beneficial ownership. We have, as well, eliminated nuisance fees in the Stamp Act for documents unrelated to the transfer of property or registering a financial instrument,” Mr Davis said.

Promising more focused attention on the Family Islands, he added: “We have allocated 10 percent of overall revenue collected in the Family Islands from property tax and road traffic fees to the creation of a Family Island Development Trust Fund in the amount of $200m. This fund will facilitate the Government in making immediate and significant investment in Family Island infrastructure. This fund would be a sub-fund of the National Infrastructure Fund.

“We also propose to leverage the aviation-related revenue to create a fund for aviation infrastructure, which would be another sub-fund of the National Infrastructure Fund. This, combined with the Family Island Development Trust, will accelerate the reconstruction of Family Island airports. It will also end the practice of Family Island infrastructure improvements being made a lesser priority than infrastructure improvements in New Providence.

“It is important to note, however, Madam Speaker, that this does not mean that we will exclude Family Island projects from future capital budgets of the Ministry of Public Works. Far from it. It just means that the Family Islands will have their own dedicated fund to ensure that they keep pace with national development.”

When it came to marine resources, Mr Davis said: “We are increasing royalty fees for the export of seafood, and we are also formally prohibiting the export of conch in commercial quantities in order to encourage sustainable fishing of this precious resource....

“We are reducing the duty on roofing materials, plumbing materials and electrical supplies. This will make it more affordable for everyone in The Bahamas to undertake any construction project. We have also reduced the duty on electric cars with a value of under $70,000 to 10 percent.

“For vehicles over $70,000 the duty will be 25 percent, the same framework that presently exists for all hybrid cars. These duty adjustments are part of a deliberate strategy to reduce national our carbon footprint.”