Barbados’s government has announced that it is seeking to put in place tax relief for first-time low-income homeowners in the form of value-added tax concessions.
As part of the government’s initiative to increase housing on the island, Minister for Education and Human Resources, Ronald Jones announced the introduction of the Value-Added Tax (Amendment) bill into the House of Assembly on January 20. The concession will allow people who invest in having their first house built to claim back 7% of their VAT bill, providing their house is worth less than USD150,000.
It is hoped that the new measure, which is part of the government's Housing Every Last Person (HELP) initiative, will encourage Barbadian nationals to build their own homes instead of relying solely on the government to increase housing stock.
Speaking to the House of Assembly Ronald Jones said: “After very careful examination, one has been able to put in place the start of sustainable delivery of a promise made to the citizens of Barbados in the 2008 budget bill. The careful examination of the impact of such an amendment to the VAT Bill demonstrated to us, that persons who are most vulnerable, persons who are most disadvantaged, persons who have been shut out of getting affordable housing, this particular measure would assist in facilitating them achieving the objective of owning their own ‘part of Barbados'.”
Jones explained that the concessions are expected to aid potential homeowners by as much as USD10,000, further stating: “there are many people who have built homes and it takes them an extremely long time to put in place those things that are necessary for their own comfort. This is an important gesture. This gives low-income workers an opportunity to own a home, an opportunity for persons to pool their resources for the benefit of their families."
The government hopes that the concessions will also increase employment on Barbados by providing increased demand for both its construction and home-furnishing industries, which should, in time, offset the cost of the initiative.
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