Cayman Lawmakers Approve Budget Measures

by Amanda Banks, Tax-News.com, London

09 June 2006

The Parliament of the Cayman Islands has approved Finance Minister Keith Jefferson's budget proposals, which will mean an increase in stamp duty for certain property buyers in the jurisdiction.

The budget, approved May 31, has an estimated revenue and expenditure total of $851.7 (US$1,022.04) million for the coming financial year, 1 July 2006 to 30 June 2007.

One of the main features of the budget was the proposal to introduce a new tiered system of stamp duty. This will mean an increase in stamp duty rates to 7.5% from 5% for certain parcels of property along the West Bay Road corridor and certain parts of George Town. Elsewhere in the Islands, stamp duty will be increased to 6%.

A special 4% rate of stamp duty is being introduced in respect of property bought by Caymanians, although the special rate will not apply to the parcels of property now subject to the 7.5% rate. Further concessions are to be offered to nationals acquiring property for the first time.

These changes are expected to raise about $6 million in additional revenues.

The budget, approved one day prior to the start of the official Caribbean Hurricane Season, also devoted much attention to construction; some 80% of the country's infrastructure was destroyed when Hurricane Ivan struck in 2004 and now all public buildings are being constructed to withstand Category Five cyclones.

A hurricane shelter destroyed by Ivan is also being rebuilt and relocated at a cost of $1 million.

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