Formerly known as the Land & Building Tax Act, it was surrendered in 2010 after much lobbying and political pressure, resulting in a tax concession up until today. Now renamed “The Property Tax Act”, the current government administration has proposed amendments to the original tax legislation, a new fee schedule, and updated assessment methods. However, plans to reinstate this levy have been halted along the way due to hasty implementation of logistics, court injunctions and public pressure. While we await the proposed Property Tax, here’s what you should know:
What is Property Tax?
Property Tax is a proposed mandatory levy on land payable by the owner.
Who is the owner?
“The owner or occupier of any land, and the receiver, attorney, agent, manager, guardian or committee of any such owner or occupier and any other person in charge or having the control or possession of any land in the right of the owner, or having the possession in his or her own right or as guardian of any person of any such land.” 1
Property Tax is NOT:
“The liability to tax of the owner of any chattel fixed or affixed to land does not create a legal entitlement to the land upon which the chattel is located where the owner of the chattel is not the legal owner of the land.” 2
What is the proposed calculation?
The Annual Taxable Value is 90% of the Annual Rental Value of the property.
10% is subtracted from the Annual Rental Value as deductions and allowances in respect of voids (periods when the property may not be rented) and loss of rent (where the landlord is unable to collect the rent).
The Annual Rental Value is determined by the Board of Inland Revenue and is the annual rent which particular property is likely to attract having regard to the purpose for which the land is actually used, occupied or tenanted, or where it is not actually used, occupied or tenanted, having regard to the purpose for which it is reasonably suitable.
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