Surveyor body launches Property Tax position paper

The institute launched its position paper on the issue on Tuesday, and in a time of waning energy earnings their approach is that the tax’s reintroduction is inevitable.

“Property tax is coming, there is no doubt about it,” Dr Sunil Lalloo, the body’s assistant secretary told Business Day. “We would like to suggest the best way forward.”

One of the institute’s proposals is that government could be more communicative about its plans for the roll out of the tax. Lalloo said that as one of the bodies best poised to advise on property issues in the country, the IST was in the dark about how government planned to implement the tax.

He said this lack of clarification extended to the public, whom the government should be educating about the tax, particularly since no one has had to pay the tax since 2009.

“We want to see education drives for the public, so that the public is kept up to date,” said Lalloo. Part of this would be to re-orient how people see the tax. The IST assistant secretary said the tax’s image was not helped by the People Partnership’s ‘Axe the Tax’ campaign and that the public was likely to view it as an additional burden, especially if the rate they were previously paying increased.

He told Business Day, however, that if people saw property tax revenues at work in their communities, they were less likely to view the tax negatively. This is why he said the IST was supporting use of property tax revenues in Local Government.

““The assumption we have had to make is that the revenue will just be going into the Consolidated Fund. This is will not have public buy in and people are not going to like if the money is just lumped into the public purse, with the government having ultimate discretion on what happens to it. We would strongly suggest that the revenues are not consolidated, but used specifically for local government and community development.

“If people in an area were paying $50 and then they are asked to pay $500, it is reasonable that they would expect to see improvements. They would want to see their roads paved faster, they would want to see better garbage collection. They would to see better water supply. If people know that they are going to get better service delivery then they will not have a problem paying,” said Lalloo.

Noting that the Finance Ministry’s valuation division had already started recruiting property assessors, Lalloo also expressed concerns about data collection and security.

“With the current crime situation, people have a lot of anxiety about people coming to their homes to collect information and do assessments. We want to know what security measures the government is going to put into place,” he said.

Beyond this, Lalloo told Business Day that the rates charged needed to be equitable and transparent to all.

“When they send out assessors, who collect information on the properties and property owners get a notice of assessment, our question is, will this be publicised. Will property owners be able to go online and see what they versus what others are required to pay?”

He illustrated: ““You are telling me to pay $500 a year, but my neighbor is paying $200 and their property is in much better condition than mine.”

Lalloo said people should be able to query their level of taxation as is done in other countries.

The IST assistant secretary said that the body is satisfied with the current taxation percentages of three percent for residential properties, five percent for commercial properties and one percent on agricultural lands. These are based on the Annual Rental Value of the properties involved, which remains relatively static, as opposed to the capital value of the properties, which tends to change with the market value of the properties

“In comparison to other jurisdictions, it is somewhat smaller than in other Caribbean countries, with the exception of Jamaica. We think it is reasonable,” said Lalloo.

The IST is also asking that the re-introduction of the tax be scaled so that the public does not feel it all at once in the pocket. They also want concessions for senior citizens.

In the current government’s first budget in September 2016, it was announced that there would be a return of property tax in January 2017. However, this was delayed as it was realised that several properties throughout the country were not on the Ministry of Finance’s assessor’s roll and full collection of the tax has been halted until this exercise is complete, with property tax being implemented at a flat rate of three percent.

The assessment exercise is expected to be completed this year.

In last year’s budget statement, government said it expected to collect $503 million in revenues from the reintroduced property tax.

Business Day attempted to reach Finance Minister Colm Imbert for an update on how the property tax would be implemented, but up to press time, was unable to do so.

Dr Sunil Lalloo, Chartered Valuation Surveyor and Assistant Secretary, Institute of Surveyors of Trinidad and Tobago delivers his presentation at the Institute’s launch of its Position Paper on Property Tax.