Finance Minister Ashni Singh today announced the significant lifting of the property tax threshold for individuals and companies but he also announced that the valuation date will move from January 1st 1991 to January 1st 2011.
In his budget presentation, Singh noted that the property tax is currently charged on companies at the following rates: the first $1.5 million of net property is taxed at zero percent, the next $5 million of net property is taxed at 0.5 percent, and the remainder at 0.75 percent.
Singh announce that with effect from the year of assessment 2014, companies will face the following rates: the first $10 million of net property will be taxed at zero percent, the next $15 million of net property will be taxed at 0.5 percent, and the remainder of net property will be taxed at 0.75 percent.
“In other words, whereas the current tax free threshold for property tax on companies is $1.5 million, the new threshold will be $10 million, as a result of which thousands of small businesses with net property below $10 million will no longer be subject to property tax”, Singh said.
He then also announced that the valuation date for the purposes of the property tax will be revised from January 1, 1991 to January 1, 2011. This would mean that much higher valuations would be applied to property.
In relation to individuals, Singh noted that the property tax is currently charged on individuals at the following rates: the first $7.5 million of net property is taxed at zero percent, the next $5 million of net property is taxed at 0.5 percent, and the remainder of net property is taxed at 0.75 percent.
He then announced that, with effect from year of assessment 2014, individuals will be charged at the following rates: the first $40 million of net property will be taxed at zero percent, and the remainder of net property will be taxed at 0.75 percent.
“In other words, whereas the current tax free threshold for property tax on individuals is $7.5 million, the new threshold will be $40 million, as a result of which tens of thousands of low and middle income earners with net property below $40 million will no longer be subject to property tax”, Singh said.
The valuation date for the purposes of the property tax will also be revised from January 1, 1991 to January 1, 2011.
For years the property tax rate and its double taxation effect have been severely criticized. In its submissions this year to the government, the Private Sector Commission had called for major changes to the property tax.
