As the government pursues opportunities for improved revenue mobilization, residential and commercial property owners in New Providence may be seeing changes to their real property tax bills due to the recently completed valuation exercise for properties on the island.
The objective of the valuation exercise was to ensure that the taxes paid reflect the current market value of properties. The end-result of this exercise was a broadening of the tax base and an increase in revenues with 10,000 previously unregistered properties now accurately assessed and registered. Through this broadening of the base, the government believes that it is moving towards a fairer and more equitable tax system in an area that has been marked by substantial inequality.
Financial Secretary, Simon Wilson, stated that the goal of this exercise is to ensure that owners of new and higher value properties are paying their share of the tax burden, noting that most Bahamians will not see an increase and many property owners will see a decrease in their taxes.
“The government has introduced a $312.50 rebate for every owner-occupied property that effectively raises the threshold for payment by $50,000 from $250,000. This means anyone who owns a property valued at $300,000 or below will not pay real property taxes. Through the introduction of this rebate, 87% of residential property owners will pay $1,000 or less in real property taxes. The revenue gained is through a broadening of the tax base by identifying previously unregistered properties and by ensuring everyone is paying the correct amount.”
The government previously introduced a 50% waiver for pensioners, a 10% early payment waiver, and through this exercise the government has now ensured that no back taxes will be owed on newly enumerated properties. In total, nearly 70% of all Bahamians are projected to see no change or will pay less as a result of these changes. The other 30% may see increases related to the alignment of their recorded property value with the current market value, as assessed by the government, ensuring that owners of higher value properties are not underpaying.
These changes are necessary as a part of the government’s plan to stabilize its fiscal situation as it works towards increasing revenues to 25% of GDP, lowering the national debt, and investing in critical initiatives. The government is projected to potentially gain an additional $450 million in real property tax revenues over the next 4 years as a result of the new valuation exercise.
The changes are reflected in tax bills sent out to property owners during the month of January. Further legislative changes and enforcement measures are expected to be rolled out in coming months.
Source: Bahamas Information Services