Monday, July 9, 2018
BY NATARIO McKENZIE
Tribune Business Reporter
THE Bahamas Real Estate Association (BREA) remains hopeful it can secure an extension of time to implement the value added tax (VAT) increase, its president arguing: "It is not too much to ask for."
Christine Wallace-Whitfield told Tribune Business: "The government has not given us any extension or any concession to honouring the 7.5 percent VAT amount, but we are hopeful that they will reconsider and meet with us to discuss our concerns with regards to the VAT. Hopefully I am able to advise my membership of their decision of honouring the 7.5 percent VAT for sales under contract before July 1."
Mrs Wallace-Whitfield, in a previous interview with Tribune Business, called on the government to either provide a 60-90 day "transition period" for property deals signed before July 1, but which have yet to close, or "honour" them at the existing 7.5 percent VAT rate.
She told this newspaper it would prevent market disruption, and reassure both buyers and sellers, describing the sudden jump from a 7.5 percent VAT to 12 percent as "a little cut throat".
Calling on the government to work with a real estate industry that is one of its largest revenue generators, Mrs Wallace-Whitfield said it was unfair for parties to "under contract" deals to be faced with paying extra VAT on attorney fees and realtor commissions when they had a budgeted for - and had a legitimate expectation of - a 7.5 pecent rate.
Mrs Wallace-Whitfield added: "It is not too much to ask for considering the government has made provisions for the hotel sector and other sectors. We understand that the government has to do what they have to do.
"However, we would like for the government to seriously consider making this extension or at least honouring the original VAT amount at the 7.5 percent for sales under contract before July 1. Then any sales that go under contract and are negotiated after July 1 will be subject to the new VAT amount at 12 percent."
The government has given time extensions and "grace periods" to several key industries, including the hotel sector, construction and retailers, to enable a smooth transition to the 12 percent VAT. The length of these extensions/grace periods is in keeping with what BREA is requesting.