The rental value of residential properties should be estimated by homeowners on an unfurnished basis, in the current Property Tax exercise says the Finance Ministry’s Valuation Division.
The issue of how rental value would be estimated — whether on furnished or unfurnished value — has been among more frequent public queries in the Ministry’s current public education exercise on the Property Tax.
This is now in its first phase collection of information concerning residential properties. Deadline for submission is May 22. The tax will be based on three per cent of a property’s annual rental value. Forms to be submitted seek a homeowner’s estimation of their property’s rental value.
Valuation officials said the basis for estimation of a property’s rental value is as an unfurnished structure.
The Valuation Division was also contacted on queries about the tax raised by the Congress of the People on Monday.
COP leader Dr Anirudh Mahabir said “The COP has never said we want no tax on property. We want a fair, reasonable, transparent tax.”
Mahabir said COP sought a meeting with the Finance Minister to discuss several issues on the tax but didn’t get a response.
The political party raised questions about classification and criteria to be used concerning residential and commercial properties in the context of home businesses.
The Division’s spokesman said buildings are classified according to condition and quality of finishes and classification will be determined by existing uses. During site visits, valuation officials will take the measurements of a structure and proportions and rates will be based on the residential and commercial aspects being undertaken within the property.
On other COP queries, valuation officials said the annual rental value of the property is the basis of how the tax will be determined. This is according to the Valuation of Land Act (Section 2).
On COP’s concerns about protection for people on fixed incomes and the indigent, officials said legislation provides for a homeowner to apply to the Board of Inland Revenue (BIR) for deferral of tax payment.
Last Thursday Finance Minister Colm Imbert said he was considering whether to implement a full waiver for impoverished people rather than burden heirs/new owners with the tax later. He said he’d give a decision on that.
While COP’s Mahabir complained of “conflicting information” on the issue by Government, he also admitted Government has responded to several issues raised by COP.
“Last Thursday, the Finance Minister indicated he was considering converting the deferral (postponement) of the tax for pensioners and others on fixed incomes to a waiver (exemption), a matter raised by the COP since 2016.”
COP’s call for the tax to be used for provision of services to burgesses of the regional corporations, is also an issue Government will have to announce policy decision on.
Yesterday Government officials acknowledged people may feel more comfortable knowing their tax payment goes to provision of lights, security, roads and other community improvements rather than the Consolidated Fund for general Government use.
However, Imbert has said Government needs the funds due to T&T’s tight financial circumstances.
Finance Ministry officials said the property sector has been unregulated for a long time and the tax system would advance its management and assist national planning.
They also said squatters may have to pay the property tax — as the Prime Minister indicated recently — since the 2009 Property Tax Act envisaged that paying the tax didn’t give prescriptive rights to land.
Imbert said last week he was seeking a legal opinion from the Attorney General on the issue since some Opposition quarters had argued that asking squatters to pay the tax would give squatters tenure to the land.
Last week Imbert had cited the Valuation of Land Act as the basis for the current tax exercise, adding that a “perk” of paying property tax was that it reinforced ownership.
