Cayman Government Mulls Further Cut In Stamp Duty

by Amanda Banks, Tax-News.com, London

20 November 2006

Financial Secretary Kenneth Jefferson has announced that the government is considering an additional cut in stamp duty on top of those introduced in July.

Jefferson was responding to a motion by Leader of the Opposition McKeeva Bush, but he said such a tax cut could only take place if room is found in the 2006/7 budget.

In new stamp duty regulations introduced from 1 July 2006, aimed at assisting first-time Caymanian property owners, government raised the ceiling on duty-free transactions from $150,000 to $200,000 for land with a building. Purchases of land with a building exceeding this $200,000 ceiling but not in excess of $300,000 are subjected to duty of 2%.

Under the Bush proposal, stamp duty would be zero-rated on the first $200,000 of a purchase of land with a building, and subject to 2% on the remainder up to a limit of $300,000.

The Financial Secretary said that before a final decision is made on this motion, government has to analyse its overall impact on revenue for the next budget.

The 2006 budget introduced a 4% special rate of stamp duty for other property buyers of Caymanian origin, but increased rates of stamp duty for other purchasers.

Rates for these buyers now vary from 6% to 7.5% depending on the location of the property, up from 5% previously.

Recommended