St Ann’s resident Catherine Charles understands the necessity of the Property Tax, but has no idea how much she will have to pay.
“No, no, I don’t know how to calculate it,” she told Guardian Media yesterday.
Meanwhile, Marvin Ellis, from Curepe, believes bringing the tax this year would be, “totally inappropriate at this time,” but he also did not know how the tax is calculated.
That was the trend among people interviewed in Port-of-Spain yesterday. Only one man from Barataria came close.
“Uhm, well it’s a formula and a process,” he said.
Given that the Minister of Finance announced that the Property Tax for residential properties will commence before the end of 2022, Guardian Media sought to determine how many people knew about how the tax is calculated, what determines the rental value and what happens if one refuses to pay.
How will it be done?
The Property Tax one will be required to pay on a residential property is three per cent of the property’s Annual Rental Value (ARV).
Officials of the Valuation Division of the Ministry of Finance (MoF) are responsible for calculating the ARV.
It is currently proposed that homeowners deduct 10 per cent from the ARV and the remainder will represent the taxable value. If the ARV of a home is $36,000, 10 per cent is deducted and then the remainder is multiplied by three per cent, meaning the Property Tax per year for that home will be $972.
But there are many variables that will affect the ARV, such as the location and classification of the property, dimensions and if any modifications were made.
This means a home in Arouca may not command the same ARV as a similar house in Westmoorings.
Homes are also categorised as Shacks, Sub-standard, Standard Home 1 (one bathroom), Standard Home 2 (1-2 bathrooms), Modern Home (at least one ensuite bathroom and a specialty room) and Executive Home (may have at least as many bathrooms as there are bedrooms and specialised areas eg, a home office or library).
What if you don’t want to pay?
According to Finance Minister Colm Imbert, there are still over 100,000 properties for which valuation forms have not been submitted as of late February.
According to Section 6 (4), a person who wilfully— (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 of $500.
With respect to when the tax is due, according to the Property Tax Amendment Act 2018, “The annual tax due and payable in respect of every land shall be paid to the Board on or before 30th September in every year.”
If any amount of tax is unpaid on or before March 15 in the following year, then the owner will get a notice of non-payment and a further sum of 10 per cent on the amount of tax shall be added by way of an increased tax.
However, after a year of non-payment, according to Section 37 of the Property Tax Act 2009, “...the Comptroller of Accounts, District Revenue Officer or other person to whom the same ought to be paid may at any time before actual forfeiture under section 41 authorize the levying of a distress— (a) upon the goods, chattels, and effects of the owner; or (b) upon the goods, chattels and effects, being upon the lands so charged with such tax of the tenant or occupier of the lands or any part thereof charged with such tax.”
That means the state can seize one’s goods.
If five years have passed without payment, then according to Section 41 of the Act, the State can seize one’s land.
“Such land shall be forfeited, and shall vest in the State, in absolute dominion, free and discharged from all rights, estates, interests, equities and claims of any other person.”
Guardian Media asked Minister in the Finance Ministry Brian Manning if the tax will be applied retroactively, seeing as the moratorium on the tax ended in 2017. However, Manning declined to comment.
