The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Value-Added Tax (VAT) on commercial property transactions is the biggest hurdle” the industry will have to overcome as a result of tax reform, the Bahamas Real Estate Association’s (BREA) president said yesterday.

Carla Sweeting, in an interview with Tribune Business following a VAT presentation to the real estate industry, said there were many more questions than answers on tax reform, though this was to be expected.

“The commercial side of our industry is the one that has most of us concerned in that there is VAT attached to the sale price as well as the fees and, on the rental side of the commercial, it’s also included in the Common Area Maintenance (CAM),” Ms Sweeting said.

“That is our biggest hurdle we are going to have to climb - the commercial side, both rental and sales. The residential side is pretty straightforward.”

Ms Sweeting said that on residential sales and rentals, VAT will only be paid on the professional fees, such as  realtor commissions, legal fees, appraisal fees, and insurance.

On the commercial side,   VAT will be applied to the sales price as well.

Ms Sweeting said realtors who needed to register to pay VAT was also a major concern.

“I think who needs to be registered is one of the biggest concerns,” she added. “Will individual agents as well as the companies that they work for have to be registered? How will we be collecting the VAT, and from who, and then how we will be reimbursing the VAT are concerns that we have.    

“With every new thing in life there are going to be persons afraid of the change, who have concerns about the change. This is new for all of us, so we have to work through this.

“I am pleased that Mr Rolle is willing to listen to our concerns and work with some of the issues realtors have. There are a lot more questions than answers, but that is to be expected  given that this is new to everybody. I am confident that by January we would have worked out all of our kinks and our members will be more informed about how it is going to work and how it will impact them.”