The Bahamian government has called on taxpayers to settle real property tax debts by year-end in order to avoid a new 5% surcharge on outstanding tax.
According to Chief Revenue Compliance Officer at the Business Licence and Valuation Unit of the Ministry of Finance, Joseph Nathaniel Mullings, for a number of years only 62% of real property tax revenues have been paid by taxpayers, leaving a substantial shortfall and taxpayers facing surcharges.
On July 13, the government amended the Real Property Tax Act to allow owner-occupied, commercial and other property owners relief from real property tax.
The amendment states that owner-occupied properties with a market value of up to BSD250,000 (USD250,000) shall be exempt from the payment of real property tax. The surcharge on owner-occupied properties that exceed a value of BSD250,000 will also be waived if the outstanding tax is paid on or before December 31, 2009. Other properties will have the surcharge waived by 50% if the outstanding tax is paid before December 31, 2009.
However, if, after December 31, 2009, any real property tax remains outstanding in respect of owner-occupied properties with a market value of up to BSD250,000, owner-occupied properties exceeding BSD250,000, and other properties, the owners of such properties shall be liable to pay a new surcharge of 5% per annum on the outstanding tax.
All property taxes outstanding must be paid before the property is sold, Mullings said. Property cannot be transferred if outstanding property taxes exist. Each year that owners do not pay taxes, they are losing ownership in their properties, he warned. When property taxes outstanding become excessive, the property can be sold to satisfy real property tax debt, he said.
During the life of a mortgage, the lender owns the property. After the borrower has made the last mortgage payment, title cannot be transferred to the borrower if there are outstanding property taxes.
Mullings sought to make individuals aware that they could enter into an arrangement with the Real Property Tax Office to pay the outstanding tax by installments. He also reminded the public that credit cards are acceptable for the payment of real property tax.
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