T&T is getting set to reintroduce property tax as one of the revenue streams which is expected to rake in millions of dollars for the Treasury.
But this move has caused apprehension and trepidation among thousands of citizens already reeling from the effect of sickness, deaths, job losses and reduced income due to the COVID-19 pandemic. Many citizens have expressed grave concerns that they will now have to shoulder yet another bill.
But according to a valuations expert who spoke to the Sunday Guardian, there is no specific date given for the rollout of this tax, however, the Government has started laying the foundation for it.
“The Government has not actually said when it is going to implement the Property Tax, so while they are doing the preparatory work one cannot say with any sense of surety when it will be done, but they are laying the foundation for it.”
The Government has put out advertisements calling on citizens to file information on property and land ownership with the Valuation Division, Ministry of Finance (MOF). They must do so by the end of November 2021, and failure to do so can see citizens facing a fine of $5,000.
“The Government is attempting to populate the valuation roll now,” the valuations expert said.
This, he said, is the necessary groundwork that would eventually see Property Tax being levied on residential and commercial properties as well as on agricultural lands.
The Sunday Guardian called Minister in the Ministry of Finance Brian Manning and the Commissioner of the Valuation Division on the move to implement the tax, but no information was forthcoming. Manning referred all questions to the Valuation Division head. But while questions were sent to the commissioner and technical officers as directed, no one responded.
The Patrick Manning-led People’s National Movement (PNM) administration passed the Property Tax in 2009 but was unable to implement it as citizens voted them out at the polls in 2010 due in part to an ‘Axe the Tax’ campaign led by the People’s Partnership (PP) which took office from 2010 to 2015. In 2009, then Opposition Leader Kamla Persad-Bissessar joined with the Congress of the People (COP) to fight the PNM’s Property Tax initiative. Launching the ‘Axe The Tax’ campaign then, they fought against the national issue which touched every person including tenants, landowners, homeowners, business operators, and squatters. They had labelled the Property Tax as a “demonic tax.”
The Sunday Guardian spoke to the valuations expert to get some clarity.
While the PP never repealed the Property Tax Act, they never implemented it either so it just remained in abeyance.
“This means the Government does not have to go back to Parliament, they can now move to implement it which is what they are doing. There is no legal impediment whatsoever to the implementation of this tax at this time,” the valuations expert said.
According to the valuations expert, wanting to be fair to the State, moratoriums on Property Tax (previously called Land and Building Tax) were granted from 2010-2015 and 2015-2018. To date, the tax has not been implemented. That means that citizens have not been paying tax on land and building for about ten years.
Pointing to the effects of the ongoing pandemic, he described the proposed measure as a “double whammy” where your income has fallen and your cost of living has risen.
“You are being squeezed from two sides with loss or reduction of income, higher food prices and the expenses of online schooling which did not exist before, and now, this additional expense.”
However, he did not think any government would want to immediately further burden a population that is so hard-pressed right now.
‘A wealth tax’
Referring to the propensity of the Property Tax to morph into a “wealth tax,” he explained, “the better the state of your home due to improvements and amenities, the higher your property tax will be.”
He explained there were three aspects to this process–subjective, objective and relative.
“If you have a two or three-storey house with five bedrooms, objectively it will cost more to rent something like that than a two-bedroom one-storey house. The value can also be subjective as you can have a fancy house in one area of the country and that exact design in another part of the country in a lower-income neighbourhood, but the rental value will be different, so that will be subjective. Then there is relative, where the market value has to be based off supply and demand variables.”
People who have temples, storerooms, green-houses, and pet dwellings constructed on their properties do not have to worry as these structures will not be subjected to tax.
However, for those with pool houses that are comfortably outfitted and can be considered an extension of the living quarters, this will be subjected to tax and will therefore increase the owner’s annual Property Tax.
Even squatters and renters will have to pay tax as they will be classed under occupier.
Asked what could be the possible outcome if someone is unable to pay the tax, the valuations expert said there was an option in law to apply for a deferral.
For these people, no interest will be incurred on the amount which will be rolled over to the next fiscal year.
He added, however, “A deferral does not mean exemption. It simply means it will keep building and building against the property. If a person dies before this, the full amount will have to be taken out of the person’s estate unless it is passed on to someone who is also indigent…then they can get an exemption from having to satisfy the debt the previous owner would have owed, but they will now have to start paying the tax from the point of inheritance.”
While he felt it was unlikely that it will land those who are unable to pay on the streets he added, “It will be an additional burden on the population.”
‘Property Tax questions intrusive’
Agreeing the latest form that was released by the MOF last week was “intrusive and invasive,” requiring details such as whether the home has porcelain tiles or gypsum ceilings, the valuations expert said concerns had surfaced as to just how such private and confidential information could be kept from being leaked to the wrong people.
This could happen, he said, although there are significant penalties for anyone found to be leaking confidential information.
Indicating that a person has the option to challenge their valuation within 30 days of receipt of the notice of valuation, the official said it will be up to the individual to prove after a comparative analysis or submission of a certified valuation, just how much the figure should be adjusted by.
In foreign jurisdictions, Property Tax is collected by the respective municipality and funnelled back into providing and improving the infrastructural operations of the local districts such as road repairs, garbage collection, cleaning and clearing of waterways, and general beautification.
He said, “While the intention seems to be a good one, the devil is usually in the details.”
Pointing out that problems can arise when these taxes are collected and remitted into the Consolidated Fund, he said, “If the dollars are not ‘marked’, then the Government can apply it to whatever it wants to do and then allocate to the Municipal Authorities how much ever it wants to.”
Retired banker: Show greater accountability for taxes collected
Harjoon Heeralal, a retired banker of Carapichaima, felt the timing of the tax may not be appropriate given “the inability of people to meet commitments of taking care of their families, and make existing loan payments whilst still paying all the other taxes directly or indirectly.”
He said in T&T, even though taxes are derived via several means, the main grouse is the efficient use of these taxes.
“Roads are deplorable, health services are very unsatisfactory, school maintenance is dreadful, the water utility is particularly worrisome and some projects and expenditure are more nice-to-have than practical such as the national gas company issue, the failed Sandals initiative and the Toco to Tobago sea-bridge, which is yet to be justified,” Heeralal said.
He said taxes may be mandatory and owners and lessees would not be averse to paying them but asked, “to what end if tangible results are not seen in public works and social services?”
Heeralal felt the Government needs to show greater accountability for the taxes it collects so citizens will be more amenable to this latest tax rather than utilise its power to “bully” residents into toeing the line.
Things to know about Property Tax
According to the Property Tax Act 2009 and the Valuation of Land Act 58:03, amended by Act 17 of 2009:
1. Property value is calculated on:
Location of the Property (Neighbourhood)
Classification of the Property (Executive, Modern, Standard [I & II])
Category of the Property (Agricultural, Commercial, Residential, Industrial)
Dimensions – Property Floor Area
Modifications to the particular property
2. Property Tax is calculated based on the Annual Taxable Value of all land.
According to the Property Tax Act 2009, all land including vacant land in T&T shall be rated on a rental value basis. The Annual Rental Value (ARV) is the rent at which a property will be let from year to year after a deduction of 10 per cent for Voids.
Tax rates are as follows:
Industrial with building: 6%
Industrial without building: 3%
Vacant Land will also be taxed:
The (ARV) of vacant land will be found by taking a percentage of the Current Market Value of the land.
Property Tax is calculated by taking a percentage (rate of tax) of the Annual Taxable Value of all Land.
Tax rates are as follows:
Agricultural: 2 %
Residential: 3.5 %
Commercial and Industrial: 5%
3. Once authorised, officers can enter and inspect your premises at any time during the day
Once authorised by the Commissioner of Valuations, officers can enter and inspect your property, whether you want them to or not.
According to the Valuation of Land Act 18 of 1969:-
“Section 15 (1) Subject to subsection (2), the Commissioner, or any officer authorised by the Commissioner in writing for that purpose, shall for the purpose of ascertaining the value of any land have power to enter, at all reasonable hours during the daylight, in or upon any land without being liable to any legal proceedings or molestation whatever on account of the entry.”
4. You could be fined for not submitting your property tax valuation form
According to Section 6 of the Valuation of Land Act 18 of 1969:
Sub-section (1) states, “Every owner of land in Trinidad and Tobago shall make with the Commissioner, a return of the land in the form set out in Schedule II.”
Sub-section (2) states, “Where the owner of land fails to file a return, the Commissioner shall by Notice inform the owner that he is required to file a return, failing which he may be liable to conviction under this section.”
Sub-section (3) states, “A Notice under subsection (2) shall be sent by registered post.”
Sub-section (4) states: “A person who willfully—
(a) fails to make a return within the prescribed time under subsection (1); or
(b) makes a return which is defective or incomplete or which is to his knowledge false in any material particular, commits an offence and is liable on summary conviction to a fine.”
5. You have 30 days to challenge your valuation
By law, citizens have up to 30 days to lodge a complaint after receiving their notice of valuation.
According to Section 19 of the Valuation of Land Act 18 of 1969:-
“An owner or local authority who is dissatisfied with a valuation may, within thirty days after service of the notice of valuation, post to or lodge with the Commissioner an objection in writing against the valuation stating the grounds upon which he relies. The objection shall be limited to one or more of the following grounds:
(a) that the values assessed are too high or too low;
(b) that lands which should be included in one valuation have been valued separately;
(c) that lands which should be valued separately have been included in one valuation;
(d) that the person named in the notice is not the owner of the land.”