Tuesday February 9th, 2010
- Last update:6 hours 15 min ago
Property tax to rake in $1B
‘Good move, poor timing’
Published: 13 Sep 2009
Increasing property tax is long overdue, but implementing it during this period of economic decline can lead to social unrest, chartered surveyor Afra Raymond is warning. Raymond, managing director of Raymond & Pierre, Ltd, recalled that the last time the population was taxed in such a time, there was an attempted takeover of the government.
“During the National Alliance for Reconstruction regime in the late 1980s, the government introduced Value Added Tax (Vat). “There was a bloody coup d’etat in 1990.” Noting that dealing in property was a main engine of wealth among some of T&T’s citizens, Raymond said the most wealthy people didn’t have to pay taxes on their properties.
“A property tax system will raise a fair amount of money for the Government, but it should be done during a time of economic prosperity. “To implement it now is poor timing,” the Port-of-Spain surveyor said. “Taxes are being brought at a time of economic hardship, social dislocation, income decline. “This could end up in social unrest. It is fundamentally unwise to introduce a new tax in a time of economic hardship.” He said those with fixed incomes, like pensioners, and lower incomes may suffer genuine hardship, and provision should be made for them.
No more free rides
Every single property in T&T will be taxed, but the surveyor said he was “quite sure” the State will not do an individual valuation of every property, because “that’s impossible. “I believe they will do mass valuations, which means they will do an average valuation for different areas.“For instance, all houses in Trincity may have a monthly rental value of $3,000 and a yearly value of $36,000.
“The yearly tax on this will be $1,080 and the monthly, $90.” Raymond said if one of the houses in this area had termites and a leaking roof, there should be some system in place for the owner to request a new valuation.
He said during the last 50 to 60 years, property owners in T&T had a free ride, as far as property ownership was concerned, because the person who bought or sold land was lightly-taxed. “Under the present system, Government makes between $120 million and $130 million annually from taxing properties in the whole country. “It’s a good thing to maintain an up-to-date system of taxation, but it can get chewed up because of wrong timing,” Raymond said.
How taxes work out
Raymond gave some examples of how residential and commercial properties may be taxed. “Government assesses the monthly rental value of your property and works out the annual rental value, and then taxes you on that. “A typical three-bedroom house in Woodbrook, for instance, has a monthly rental value of $5,000 and an annual value of $60,000.
“The owners previously (before new tax system) paid land and building taxes or house taxes of $48 a year. “Under the new system, their taxes will work out to be three per cent of the annual rental value, which is three per cent of $60,000. “This works out to be $1,800 a year and $150 monthly.” Noting that this really is “not quite high,” Raymond gave another example of the taxes that will have to be paid on a “small office overlooking a leafy square” in Port-of-Spain.
The property is worth $2 million and the owners pay land and building taxes of $720 annually, he said.
“There is a main office downstairs and a kitchen and bathrooms.
“On the first floor there is the same thing, with two private and general offices. “The monthly rental value of this property is $25,000, which works out to $300,000 yearly. “The owners will have to pay a five per cent tax of the annual rental value of $300,000. “This works out to be $15,000 yearly and $1,250 monthly.” Raymond was unable to give an example of taxes that will have to be paid on agricultural lands. “There is a challenge in working out the rental value of agricultural lands, because there is no organised market in the rental of lands.”
“As long as my property
“As long as my property taxes are high, I have to raise rents or make adjustments.”
Samuel Richardson
“If government have a right of demanding ad libitum and of taxing us themselves to the full amount of their demand if we do not comply with it, this would leave us without anything we can call property”
Thomas Jefferson (American 3rd US President (1801-09). Author of the Declaration of Independence. 1762-1826)
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“What this project is costing the county is pennies compared to what it will generate over the next five to 10 years in property taxes and impact fees.”
Brian Blair
Somebody pockets going to get very fat!
Increase in property Tax: It
Increase in property Tax:
It would appear that our current system of property taxation has not been updated for many years, and certainly needs to be improved. But we are in a recession, no matter what spin you put on it. Our people are hurting and having a hard time coping. This gov't insists on increasing everything in order to rake in money while they squander what we have. The time is not right to put this new programme of increasing our property taxes into operation. I agree with Mr. Raymond that this should be put on hold, until we are in a stable financial situation in this country.
We do not need the money that badly, or do we?
If the gov't insists on pushing through this increase, then can you please explain to me how the P.M. Residence budgetted to cost $40M in 2007, increased to $148M and then again to $175M in 2008, and now stands at $244M in 2009, and we have again budgetted for an additional $11M. in the 2009/2010 budget. This is utter extravagance and squander.
Mr. Prime Minister and Madame Finance Minister, we will have none of this, so get back to the drawing board and put a budget in place that would assist our people, not suffocate them. Remember the people are responsible for putting you in the 'house of power' and their votes are for sale going to the lowest bidder or the one who imposes the least pain and hardship. It may be PNM till we die, but that will not last if the back pocket gets emptied.
You have no choice but to put this increase on HOLD.
Yes agree, put it in the
Yes agree, put it in the freezer for now. Then when times are getting better, we review how best to rationalise the property tax. Then when we agree when to slap TT with it, we want a say how you spending the money. You see the roads in Lightbourne Caratal? you see the farmers cant get to their crops? bridges broken? Why do you need 1B$ TT extra now from us? what you going to do with it? property tax is for services not for general expenses to buy steel and hardware. In the UK the poll just said the people want less services at this time and do not increase taxes. Here TT is increasing taxes but still lack of services in many areas. What happened to water supplies, pipebourne 24/7? What happened to cleaning those drains? and a host of perennial needs that go unanswered.
Finally, someone from the
Finally, someone from the valuation community speaking out and helping to articulate what the Finance Minister couldn't. Thanks to Mr. Raymond for helping us to better understand this tax proposal.
Also agreed that no responsible government would put foward such an increase in times of an economic downturn. (But remember, the government is steadfast in its denial of the recession). Most will see that there is a need for Property Tax reform (Woodbrook property tax at $48 is ridiculous..), but remember that the general population and seniors are on fixed incomes. Mme Finance Minister has indicated that the reform will start on January 1, 2010, with a fully computerized system. Has anyone seen the current state of the records and offices where taxes are paid ? The timing of this changeover seems unlikely, as this is less than 4 months away.
D. Smith notes that revenues generated by property taxes are SUPPOSED to fund infrastructure such as water, sewerage, roads, schools, libraries etc. but sadly we can see the state of all these. I am hard pressed to name anyone who gets a steady water supply 24/7 or even 24/2. We need the Finance Minister to tell us clearly whether or not these new tax revenues will go specifically towards fixing up roads, sewer and providing a steady water supply.
By the way, the Finance Minister also indicated (see the detailed budget document) that the Sewer services will be spun off from WASA and given to Waste Management to manage. So, here are some other questions:
- will WASA now bill us for Water Services only, and will future bills reflect this (i.e. reduced rates, for water only)
- will home owners now get a bill from Waste Management for Sewer Services only ?
The public and homeowners in particular, deserve nothing less than some clarification of all of these issues from the government.
"No more free rides"???? To
"No more free rides"????
To Agree with Gardenia and others. True this Gov't really should have held out for the appropriate time. But one of this Gov't's heartless knack is bad timing. Gov't in other countries are trying to help out it's people by giving them incentives to help them get out of this recession, while this Gov't kicks the people while they are down.
Nearly 400 fired from La Brea this week. Those who don't bounce back with a job, how are they going to afford this? People are losing their jobs all over - it does not make headlines everyday- where are they going to get the extra funds for this? When the figures are broken down it may not seem like alot to a some people but to alot nowadays its is ridiculous.
And to add to the questions from a few people. I for one would like a transparency report of these funds from the property tax. where will it be going? Are we to read in a few weeks that Caesar Manning outfitted his house with new drapes for Christmas running up to a ridiculous figure?? Or -
Am I to Expect more Highway patrols?
Will There be more beds in the Hospitals?
Will ALL THE LIGHTS ON THE HIGHWAY (Both Lanes) BE Working?
Will roads be fixed in a timely manner?
Just to name a few...
Also, what will the taxes look like for people in national Housing as compared to others??
And I wonder just who is having the "Free Ride" - the people or the Gov't? There is a tax for nearly EVERYTHING in this country it's ridiculous! When you go in Gov't office you have to pay for everything. Where is the money from those expenses going? To get your passport YOU have to bring the photocopies of your documents ...And go on a wait list for service. Licensing office to this day have only (1) ONE computer that is covered in dust which still running DOS! And they STILL don't accept LINX (which I found out the hard way...).
Am I to believe THIS is 2020vision?? Some body better get their eyes checked oui!
I out wit that- Vote PNM He Really Does WHATEVER!!!
Please enlighten me! I have
Please enlighten me!
I have a copy of the draft estimates of revenue and expenditure, they are available here: -
http://www.finance.gov.tt/documents/publications/pubD5684D.pdf
In the draft published the collection estimate for 2010 is TTD 325,000,000 and the revised estimate for 2009 is TTD 72,768,000.
Could the author of this article enlighten me as to how the TTD 1 billion mentioned in the article was arrived at?
I agree, how did the author
I agree, how did the author arrive at $1b in property taxes. The decline increasingproperty taxes of about 10m in 2008/9, how does this translate realistically? HDC and private realtors have been constructing homes and there's construction boom here. Apart from this, there's no destruction of homes via huricanes or other natural disasters. How do we account for $10m decline in this 1yr period?
It is only fair if property values are increasing that the tax must also increase. Minister Tesheira in the budget speech published in the Guardian on Tuesday 8 Sept 2009 stated 'property taxes are governed by land and building tax act of 1920 where the last global assessment was conducted in 1948'.
When is the 'right moment' for change? Human nature will resist change now and always.
According to Afra Raymond, the increase may not be what we think it is. He has given some realistic monthly figures of about $200 instead of the ridiculous $200 annually.
Global competitiveness demands global responsible behaviour. Social unrest is not the answer. Developing economies mean developing values, mature thinking. Maybe it is time to love our country!
And so do I! I have sent an
And so do I!
I have sent an email to Mr. Raymond seeking clarification of this and other issues which I gleaned from the Tax ordinance 76:04, and I do hope that he answers some of the questions, if he could. To me the burning question is that the act says that from 1948 these assesements which are done by the District Revenue Office is to be done in 15 year cycles. Check it out and let me know what your conclusions are.
Increase In Property
Increase In Property Taxes
This proposed taxation system has to be carefully implemented if it is to work. Increasing taxes in an already depressed period in this area will invariably encourage the eventual collapse of the market. I can envisage individuals investing in property elsewhere and the resulting capital flight leading to our position in the late 1970's and 1980's when there was over-regulation of foreign exchange dealings and transactions. I also feel it is unfair to tax pensioners and other individuals with incomes that, in real terms, are ever shrinking. Provision needs to be made for the establishment of a discount booklet alongside the regulations to cater for all the necessary odd situations that need to be catered for.
This now brings us to a position where all home owners shall be involved in something that is complicated, possibly to a degree of subjectivity. Is this what we really want?
This proposed system will leave much of our country in a state of possible disarray as larger properties become abandoned and disregarded by owners who try to flee an ever imposing authoritarian system.
The health, safety and well being of citizens is more important than the taxation of hard working home owners.
IF TRINIDAD WAS A UNITED
IF TRINIDAD WAS A UNITED PLACE, WE COULD ALL COME TOGETHER AND NOT PAY THE TEXES. WATCH HOW QUICK THE GOVERNMENT WOULD REVIEW IT. BUT IN TRINIDAD, WE'RE TOO SELFISH AND ALSO DIVIDED.
...where has all the money
...where has all the money gone?.....the rich get richer and the poor get children....
Where all the money gone?
Where all the money gone? Good questions, as my former teachers would have remarked, buying time to think up an answer. We'll need one of those (in)famaos Commissions of Enquiry to begin to find out. Not even the old Sherlock Holmes could solve this mystery and then say to his good friend "elementary, my dear Watson". Maybe at the bottom of the Treasury there is a cave tunneled to the money vaults and the hounds of the Baskervilles with a predilection for dough inhabit it, or as it's Trinidad it must be the sewer rats, noted for their addiction to coke. Who knows? Then again some smartman must have been siphoning it out to Canada or Malaysia or Panama or Costa Rica. Didn't we open an Embassay in Costa Rica? There are so many these days, I'm losing count. Notice how we buying and refurbishing properties in Canada and not so long ago opened an Embassy in Kuala Lampur (Malaysia). And you know how money makes good pocket liners. Now that the money running out, if hasn't as yet run out, and we we promised the boys up the islands that we'll replenish their coffers if they integrate. If we don't cough up, they'll sell out to Chavez. And do We want that? No! (And I'm speaking here in the Royal plural to give Myself gravitas and hubris before Nemesis catches up with me, but remember I've made my peace and I have no fear of Basil, fear of the inevitable is for lesser mortals, not the Colossus of Rhodes). It takes money and gold to build Empires, you know; ask Spain, ask France, ask Great Britain, ask Holland, ask America and the other fellow imperialists and Emperors.
Another few thoughts on this
Another few thoughts on this matter:
1). Will the owner of vacant land pay no taxes, as there is really no structure that can be rented out (other than a tent or cardboard box).
2). What about a 'lean-to' - a property with maybe a 1 room wooden structure, that is always flooding ? Can that be rented out, and at what value ?
Etc, etc...
See the predicament we are potentially getting into ?