AUDIO: Property Tax interview on 96.1FM

This is my interview on 96.1 FM with Nikki Crosby on Tuesday 2nd May 2017…this was a great session with Tweez…Rodey and Raw Fusion…there were also some engaging ‘phone calls and text messages from the public. Audio courtesy TTRN

Programme Date: 2 May 2017
Programme Length: 00:34:37

Property Tax FAQs

This article contains background information on the new Property Tax and answers some Frequently Asked Questions.

Getting the data
In this information age, the government was not able to create an accessible database into which property owners could have directly uploaded the required property details. Why not adopt this more efficient method to gather the information? We can, and must, do better.

Whose Taxes?
These taxes seem to be payable to the Consolidated Fund. It is my view that they ought to be collected by the respective Local Government bodies.

I support the re-instatement of the Property Tax, it is long-overdue and property owners have enjoyed a seven-year holiday since it was last collected in 2009. I have two substantial criticisms which are set out in the sidebar, but overall this is an important and positive move by the government.

There are strong objections and many questions on this new tax with two main sources – people who are genuinely unsure of how the new arrangements will work and political objectors from the Opposition.

These are the national totals of Property Tax paid in the period 1993-2009, compiled from –

  • House Rates, which is paid in Municipal Corporations, from the Estimates of Revenue and Expenditure for the Statutory Boards, Similar Authorities and the THA.
  • Land & Building Taxes, which is paid in the rest of the country, from the Estimates of Revenue.

property tax1993-2009

Millions TT$
Year Land & Building Taxes House Rates TOTALS
1993 72.04 17.83 89.87
1994 109.38 22.78 132.16
1995 60.89 22.55 83.44
1996 58.64 28.81 87.45
1997 56.63 26.61 83.24
1998 55.78 25.49 81.27
1998/1999 61.56 31.56 93.12
1999/2000 63.90 35.48 99.38
2001 59.11 35.97 95.08
2002 94.08 35.57 129.65
2003 77.50 49.19 126.69
2004 85.54 59.00 144.54
2005 62.68 61.35 124.03
2006 64.35 55.91 120.26
2007 83.72 66.16 149.88
2008 83.77 66.16 149.93
2009 72.77 69.75 142.52

The objections from the Opposition elements are bemusing, to say the least, given the pattern of tax collections set out in the graph and table. Plainly, when the UNC was in power in the period 1995-2001, there was a dramatic and unexplained decline in the collections of property tax. That decline was reversed when the UNC left office.

An explanation as to the dates – Up to the start of 1998, the country’s fiscal year-end for national accounting was 31st December. There was a transition between 1998 and 2001, with periods to be read as follows ‘1998’ is 1st January to 30th September of that year: ‘1998/1999’ is 12 months ending 30th September 1999 and 1999/2000 being 12 months ending 30th September 2000.

FAQs

I built this property with my own money and effort, so why should I have to pay taxes on it?

This common argument is simply untenable, since if that principle were widely applied there would be no case for any type of Corporation or Personal taxation.

We already pay Stamp Duty when we buy our properties, so why should we have to pay more than one tax? Isn’t that ‘Double-Taxation’?

Again, returning to the comparison with companies, tax is due in different modes such as VAT on sales, Green Fund, Business Levy and Corporation Tax on profits. What is it about property which creates the justification for a single mode of taxation?

Do I have to complete the Valuation Return Form or let Field Assessors into my property?

There are penalties for non-compliance with those requirements and of course there is the prospect that there will be the usual bane of non-enforcement, but there are perils to that course of action. If a property owner did not comply and then appealed the assessment, it would be an uphill battle to persuade a tribunal that the State had acted unfairly when one had not provided the accurate information as required.

What about properties which are not actually rented? Why is Property Tax due on those?

This is a tax on the rental value of the property, levied on its owner, who can either benefit from the rental itself or the pride of ownership arising from having no rent to pay.

How can an estimate be done of rental value if no property is rented in the area?

That is a matter of professional judgment based on the available records and rental advice forms part of every mortgage valuation in every part of the country at present.

The innate effectiveness of this tax is that property is an immovable asset, so those persons and companies which are now evading other taxes will be unable to escape this new tax on the various properties in their ownership.

AUDIO: PROPERTY TAX FACTS Interview on Sky 99.5 FM

sky995fmAfra Raymond was interviewed on Tuesday 28th March 2017 on SKY 99.5 FM on the impending Property Tax by Jessie-May Ventour, Eddison Carr and Dr Wayne Haywood. There is a lot of misleading and uninformed talk on the Property Tax at the moment, so this is intended as a corrective…

Programme Date: 28 March 2017

Programme length: 00:41:04

Property Matters – HDC Acts

Three laws being broken

  1. HDC Act (no 24 of 2005) – At sections 18,19 and 20 require HDC and the Housing Minister to publish audited accounts within 6 months of the end of every financial year.
  2. Integrity in Public Life Act – At S.24 (3) prohibits Public Officials (which would include the HDC Board) from ‘…undertaking any project or activity involving the use of public funds in disregard of the Financial Orders or other Regulations applicable to such funds…’
  3. Securities Industry Act 1995 and the Securities Industry Bye-Laws 1997 – These require HDC, as an issuer of bonds, to publish its audited accounts annually for the information of bondholders.

hdclogo

The HDC has never published its audited accounts since it was established in October 2005 to replace the National Housing Authority (NHA). The previous article highlighted the HDC’s missing accounts and made the point that their failure or refusal to publish those audits was in breach of at least three laws (see sidebar).

On 3rd January 2017, I made a Freedom of Information request for details of NHA and HDC transactions in Public Money in the period 2003-2016, during the life of the current (2002) Housing Policy. The Public Money received would include budget allocations; monies derived from property rentals and sales; bank loans and bond funding. It is important to separate recurrent and capital expenditures. I also asked for those amounts to be itemised by year so that trends can be identified for further examination. Continue reading “Property Matters – HDC Acts”

Property Matters – HDC Financing

“…There are a lot of things that did not go right in the NHA and one of those things had to do with accountability…The HDC is not going to function like that. We are required by law to have the accounts ready in a certain period of time. The CEO will be held accountable and the Cabinet will hold the minister accountable and the Parliament will hold the Cabinet accountable. That is what the HDC means…”

—Then Housing Minister, Dr Keith Rowley, speaking at the launch of the Housing Development Corporation (HDC) in October 2005.

Keith Rowley
Former Minister of Housing, Keith Rowley, M.P.

This week I am shifting focus from the ‘Affordability Hoax‘ to the financial aspect of our country’s large-scale public housing program as conducted by the HDC. I am therefore ignoring other agencies such as the Land Settlement Agency and other types of State funding or tax allowances such as mortgage relief etc.

Dr Rowley was referring to these obligations in the HDC Act (No 24 of 2005)

  • S.18 – to keep the HDC’s books and accounts in accordance with proper accounting standards;
  • S.19 – HDC’s accounts to be audited annually to proper accounting standards, with that audit report submitted to the Minister and the Board;
  • S.20 – HDC’s Board to submit its Annual Report to the Minister within three months of the end of the financial year and the Minister to publish that Report to Parliament within three months of its receipt.

But the HDC has never published any audited accounts in the eleven years of its existence, spanning three political administrations, thus far. That failure and/or refusal to publish audits is in breach of those sections of the HDC Act. Continue reading “Property Matters – HDC Financing”