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New Jamaican Property Tax Regime starts today on April 1

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Starting today, there will be some major changes with regard to how property taxes are calculated in Jamaica. How will this affect you? Read on to find out more.

The two biggest changes are as follows:

1) Change in Valuations

Property tax will be determined using valuations done by the National Land Agency in 2013 instead of 2002.

Property tax is calculated against the unimproved value of the land. For those of you who are not too clear on this we do mean just land, that is, not including the value of any buildings which sit on the property. Also, unimproved land is the value a land owner could be offered for the land, if it was put up for sale without any improvements made.

If you have been watching the market, you’ll readily realise that property values have risen since 2002, and so valuations from 2013 are probably higher than those done in 2002. As a result, in changing only the valuation basis, quite a few people would see a jump in the amount of property tax they’d need to pay the government. This means that for quite a number of landowners, the basis for the property tax calculation could have increased significantly.

So what did the Government do? They increased the value bands and reduced the rates.

2) Different value bands and rates

Property tax will now be calculated using 8 value bands instead of 3 bands, with reduced rates.

According to the Minister of Finance, Audley Shaw, approximately 61,835 of property owners (8%) will experience no change in their property tax liability with 210,512 (27.1%) persons having a reduction.

However, let’s be clear. For the majority (64.9%), this means an increase in property tax. How much of an increase? It all depends on the new unimproved value. You can use the Tax Administration Jamaica Property Tax Online Query to find your new land value. You'll need to have your valuation number on hand.

If you don’t agree with the valuation figure, you can lodge an objection with the Commissioner of Land Valuations at the National Land Agency. You’ll have 60 days.

If you can't afford the increase in liability, checkout the Property Tax area of Tax Administration Jamaica's website for a list of the mechanisms put in place by the Government for relief from Property Tax.

So here are the new valuation calculations.

1) Is $400,000.00 or less --- $1,000.00

2) Exceeds $400,000.00 but does not exceed $800,000.00
- for the first $400,000.00 --- $1,000.00
- for every dollar thereafter --- 0.80%

3) Exceeds $800,000.00 but does not exceed $1,500,000.00
- for the first $400,000.00 --- $1,000.00
- for the next $400,000.00 --- 0.80%
- for every dollar thereafter --- 0.85%

4) Exceeds $1,500,000.00 but does not exceed $3,000,000.00
- for the first $400,000.00 ---$1,000.00
- for the next $400,000.00 --- 0.80%
- for the next $700,000.00 --- 0.85%
- for every dollar thereafter --- 0.90%

5) Exceeds $3,000,000.00 but does not exceed $4,500,000.00
- for the first $400,000.00 --- $1,000.00
- for the next $400,000.00 --- 0.80%
- for the next $700,000.00 --- 0.85%
- for the next $1,500,000.00 --- 0.90%
- for every dollar thereafter --- 1.05%

6) Exceeds $4,500,000.00 but does not exceed $7,000,000.00
- for the first $400,000.00 --- $1,000.00
- for the next $400,000.00 --- 0.80%
- for the next $700,000.00 --- 0.85%
- for the next $1,500,000.00 --- 0.90%
- for the next $1,500,000.00 --- 1.05%
- for every dollar thereafter --- 1.10%

7) Exceeds $7,000,000.00 but does not exceed 12,000,000.00
- for the first $400,000.00 --- $1,000.00
- for the next $400,000.00 --- 0.80%
- for the next $700,000.00 --- 0.85%
- for the next $1,500,000.00 --- 0.90%
- for the next $1,500,000.00 --- 1.05%
- for the next $2,500,000.00 --- 1.10%
- for every dollar thereafter --- 1.15%

8) Exceeds $12,000,000.00 but does not exceed $30,000,000.00
- for the first $400,000.00 --- $1,000.00
- for the next $400,000.00 --- 0.80%
- for the next $700,000.00 --- 0.85%
- for the next $1,500,000.00 --- 0.90%
- for the next $1,500,000.00 --- 1.05%
- for the next $2,500,000.00 --- 1.10%
- for the next $5,000,000.00 --- 1.15%
- for every dollar thereafter --- 1.25%

9) Exceeds $30,000,000.00
- for the first $400,000.00 --- $1,000.00
- for the next $400,000.00 --- 0.80%
- for the next $700,000.00 --- 0.85%
- for the next $1,500,000.00 --- 0.90%
- for the next $1,500,000.00 --- 1.05%
- for the next $2,500,000.00 --- 1.10%
- for the next $5,000,000.00 --- 1.15%
- for the next $18,000,000.00 --- 1.25%
- for every dollar thereafter --- 1.30%

Don't remember the old valuation basis? Here are the value bands used in 2016.

1) Is $100,000.00 or less --- $1,000.00

2) Exceeds $100,000.00 but does not exceed $1,000,000.00 ($1million)
- The first $100,000 --- $1,000.00
- For every dollar thereafter --- 1.5%

3) Exceeds $1,000,000.00 ($1million)
- The first $100,000 --- $1,000.00
- For every dollar thereafter up to $1,000,000.00 ($1million) --- 1.5%
- For every dollar in excess of $1,000,000.00 ($1million) --- 2%

How has the General Public has responded?

Since the new property tax regime was announced, there has been a lot of uproar including from the Realtors Association of Jamaica, the Jamaica Manufacturer's Association, the Jamaica Hotel and Tourist Association and the People's National Party. There have been requests for the Government to make changes or consider a temporary rollback.

However, the only update made thus far is that the Cabinet will discuss the matter on Monday.

Remember there's still time to pay.

There is still time before property owners have to pay their property tax. Payments must be made by the end of the calendar month for which the property tax is due.

You can pay annually (in April), biannually (in April and October), quarterly (in April, July, October and January) or monthly, with the latter option not available for those lowest rate of charge (i.e., $1,000).

So where do we go from here?

Check back with us on Nohuts.com. We'll be posting any updates obtained from the Government after the Cabinet meets.

This article is for general information purposes only and does not constitute legal advice.

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