When taxpayers arrived at Board of Inland Revenue offices yesterday to fulfil their tax obligations, they were shocked to be greeted with a notice announcing the immediate suspension of property tax payments.
The move came without prior notice, and, as of last night, there has been no definitive word from the Ministry of Finance regarding the development.
Finance Minister Colm Imbert, who typically utilises his X account to provide updates to the public, remained silent on the issue on the social media platform yesterday.
Amid the confusion, a notice was circulated yesterday revealing the Government’s intention to introduce a bill in Parliament today, titled “An Act to amend the Property Tax Act Chap 76:04”, in the name of Finance Minister Colm Imbert.
According to the amendment, the Government is proposing a reduction in the property tax rate for residential properties from the current rate of 3% of the Annual Rental Value to 2%.
The bill is scheduled to be debated in the House of Representatives from 1.30 p.m.
It is expected that the Government will propose that the next stage of the bill be addressed on Monday, following today’s debate.
Additionally, the amendment is intended to extend the deadline for issuing a notice of assessment, for this year, on or before June 30.
The amendment is also proposing to grant Imbert the authority to appoint deadlines for specific actions to be completed.
The amendment calls for the deletion of the word “affirmative” and the substitution of the word “negative”, thereby shifting the burden to Parliament to actively object to the action or decision within a specified period for it to be prevented from coming into force.
What Imbert said
The highly controversial property tax came into effect from January 1. “We do intend to collect property tax in 2024,” Imbert told Parliament in December 2023, also announcing adjustments to the regime, including the annual deadline.
When Imbert delivered the 2024 budget in the Parliament in October, he had advised that the collection of property taxes would be effective in financial year 2024.
Speaking on the Finance Bill 2023 in December, Imbert noted implementation of the property tax was “just a couple weeks away”.
“For the record, the Property Tax Act makes it clear property tax is only 3% of the annual rental value for residential properties, after first deducting 10% from the Annual Rental value. It is not the same amount as the rental value,” the Finance Ministry stated in November.
“For example, a property which has been assessed to have an annual rental value of $36,000 will attract property tax of $972 per year or $81 per month. The formula is as follows: Property Tax = Annual Rental value (ARV) x 90% (0.9) x 3% (0.03). In the example given, this works out as $36,000 (ARV) x 0.9 x 0.03 = $972 in property tax per year or $81 per month,” it stated.
UNC: Stop the wicked tax
Meanwhile, A media release from the United National Congress yesterday called on the Government to clarify property tax confusion and “stop this wicked tax now.”
“The UNC calls on the Government to immediately clear up the confusion surrounding the notices circulating online and, apparently, also in Government offices, regarding the alleged suspension and/or alteration of the dreaded property tax,” it stated. “Going further, however, the UNC urges the Government to immediately stop the implementation of this wicked tax and re-implement the previous (2009) Land and Building Taxes,” it stated.
The UNC yesterday said it remains committed to fighting against the imposition of this “unfair property tax”.