Property owners will face stiff taxes from January 1 next year.
The 2010 national budget measure proposed by Government seeks to implement a new Property Tax Information System to assess properties and collect taxes.
But several experts have suggested that the system will force homeowners and commercial customers to pay thousands of dollars in new taxes and will also affect mortgage activity.
Economist Dr Patrick Watson said yesterday the property tax regime will ’increase the burden of an already overburdened middle class’ in the country.
He was speaking at a post-budget forum held at the Chamber of Commerce, Westmoorings.
Watson calculated that people who current paid less than $300 a year in land and building taxes might have to pay more than $3,000 per annum.
The new system assesses properties on a rental value appraisal method and charges three per cent for residential properties and five per cent for commercial customers.
Finance Minister Karen Nunez-Tesheira told the forum yesterday that property taxes dated back to as early as 1948 and the system needed revamping.
The Valuation Division will now assess properties based on how much money could be collected if they were rented and a percentage of this amount will constitute the new tax.
She said the tax would be implemented on a base rate of three per cent for residential properties.
’It is not a tax on you, it is tax on your property,’ she said, causing the audience to laugh.
But Jean de Meillac, general manager of Terra Caribbean, told the Express yesterday that what this meant was that a Woodbrook home worth $1.2 million and which could be rented for about $9,000 a month would now incur $3,000 a year in residential tax instead of current rates of about $120 a year.
He said property owners were likely to get upset because they were asked to pay for something that did not benefit them.
He said the increased taxes could also keep real estate prices distressed and prices could soften further.
Ingrid Lashley, general manager of the Trinidad and Tobago Mortgage Finance Company, told the Express by phone yesterday that taxes could impact on household income and would have an impact on the market.
