Weekend Report | The Freeport News | PDF Online Guide

Friday, June 19, 2009

Home National Sports Business Lifestyles Religion Arts & Culture Pulse Spice Editorial letters Opinion Foodie Sportscope Real Talks Weekend Report PDF's Classifieds Contact About Us Archive Weather

BREA hopes are alive! By INDERIA SAUNDERS ~ Guardian Business Reporter ~ Inderia@nasguard.com: The prayers of local realtors long-calling for government to reinstate a $35,000 cap on real property taxes may be answered today with the delayed tabling of budget changes. "We will table the bill (Friday) and it will have something to do with rates," was all Tommy Turnquest, leader of government business in the House of Assembly, would tell Guardian Business yesterday. Still, that there will be changes of any kind to the plan initially laid out in the budget proposal stirred hope among realtors. They were largely critical of the PM's rejection of a cap on real property tax. In fact the budget proposal would actually increase the tax burden on very high-end homes marketed to second-home buyers. "The existing three-rate structure on owner-occupied properties is being replaced by a two-rate structure," said Hubert Ingraham in his budget presentation in May. "A rate of 1 percent on properties valued up to $7.5 million over the exemption of $250,000 and, for properties in excess of $7.5 million, a rate of 0.25 per cent on the value in excess of $7.5 million." They were changes that appeared to be the exact opposite of what real estate agents working to shift the country's multi-million-dollar homes were hoping to hear from the prime minister. For example, under those proposed changes, a house valued at just over $5m would then attract $50k in taxes instead of the current $37,500 dictated by the present 0.75 percent rate for such homes. Under the code that existed before last year's budget changes, that owner would have paid no more than a $35k cap. Realtors had expected the government to reinstate that ceiling. The move would have reduced costs for high-net-worth foreign buyers of homes valued in excess of $5m. President of the Bahamas Real Estate Association (BREA) Willie Wong held onto hope yesterday, following the prime minister's unexpected decision to hold back the real property tax portion of the budget Wednesday. The rest of the proposal was voted on and approved. Since his May budget address, Ingraham has also addressed BREA, suggesting it would be unfair to hand wealthy rate payers a more favorable rate than owners of more modest abodes. He's expected to deliver his final amendments today. "I hope it is tweaked in the right direction," Wong said last night. "In this economy, government should be encouraging people to buy, not discourage them and the [present] real property tax [structure] is a deterrent. "The government needs to stimulate the economy by dropping these taxes." And last month's budget actually increased them. Under the new proposed changes, a house valued at just over $5m will now attract $50k in taxes instead of the current $37,500 dictated by the present 0.75 percent rate for such high-end homes. Under the code that existed before last year's budget changes, that owner would have paid no more than the $35k cap. The news for buyers of $10m homes is even more striking, with demands they write a check for $78,750 to the treasury — and neither the current $75,000 or the $35,000 of pre-fiscal 2008/9. Friday, June 19, 2009