Monday, February 23, 2009
A LEADING realtor is urging the Government to reverse its Stamp Tax increase on real property transactions, arguing that it is costing the Bahamas much-needed business and discouraging both local and foreign buyers.
Mario Carey, head of Mario Carey Realty, reiterated his call for the Government to revisit - and reverse - the Stamp Tax increase implemented in the 2010-2011 Budget, citing the US National Association of Realtors' findings that the sale of a single house equals three full-time jobs.
According to Mr Carey, reducing the Stamp Tax will spur sales and boost the economy. Mr Carey said a 12 per cent Stamp Tax rate imposed in 2010 on all property transactions of more than $250,000, coupled with increases in annual property tax, is costing the Bahamas.
"The banks can't lend because people don't qualify, and the cost of doing a real estate transaction is too high; it's a bad cocktail. There isn't any attention being paid to the real estate sector. We don't see where we as a country are focusing on the real estate sector. There is no incentive there," Mr Carey told Tribune Business.
He added that in countries such as China, the government there is encouraging new opportunities for ownership by offering financial incentives - a Stamp Tax of 2 per cent and no annual property tax.
In Panama, he said, their government has initiated a 20-year exemption from real property tax for the same reason - to spur activity in real estate, where ownership creates a ripple effect, fuelling jobs in everything from construction to long-term staffing, boosting revenue and economic activity.
"I hope that the Government addresses the current Stamp Tax policy and considers lowering the rate in order to create jobs, which we urgently need. When luxury housing sales are down, the people who suffer most are those in the middle income category. When the housing market is active, everyone wins. We cannot afford to lose one single real estate transaction," Mr Carey said.
Another realtor, Mike Lightbourne, head of Coldwell Banker Lightbourne Realty, in a recent interview told Tribune Business described the real property tax and stamp duty as a "nuisance", although he did not feel it was as great a deterrent as some made it out to be.
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