By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian realtor yesterday asserted "there's got to be a simpler" way for the Government to eliminate VAT evasion on property sales without "unfairly and inequitably" burdening the industry.

David Morley, broker/owner of Morley Realty, told Tribune Business that the original legislative reforms accompanying the 2025-2026 Budget have "changed slightly" but are still requiring realtors "to do what the Department of Inland Revenue won't do" and check that attorneys have paid the due VAT and registered the conveyance in the Registry of Records.

Reiterating that realtors' roles are largely confined to marketing properties, and putting transactions together by matching the buyer and seller, he added that the industry has no control over the conveyance's execution, recording, the transfer of title and payment of VAT due on the sale as this is all handled by the attorneys. Yet the Budget's legislative reforms now make them "jointly and severally liable" for the tax.

And Mr Morley also voiced concern to this newspaper over how the reforms will be implemented and operate in practice, asserting that too often the Government leaves it up to individual departments and agencies to interpret legal changes and the intent behind them, plus the mechanisms and processes that will be used to give the changes due effect.

He spoke after Ryan Pinder KC, the Attorney General, confirmed to the Senate during the 2025-2026 Budget debate that the Conveyancing and Law of Property Bill 2025 no longer stipulates that all real estate transactions from July 1, 2022, will be deemed void if not recorded in the Registry of Records.

"There is a concern that significant illegal tax avoidance in Bahamian property transactions exists; persons not paying the VAT due and not registering their conveyances. This Bill is intended to curtail this," he said.

"A new section 40 provides that VAT invoices must be obtained before executing conveyances of real property, the VAT must be paid within 180 days of execution and conveyances must be registered within 180 days of execution.

"The parties involved (buyers, sellers, attorneys, real estate agents) are jointly responsible for ensuring VAT compliance. To provide further checks and balances, financial institutions cannot disburse loans or mortgages for property transactions unless VAT invoices are verified."

Mr Morley, noting that realtors also still have to notify the Department of Inland Revenue within 30 days of a property deal's completion, said: "What they're doing is still holding the real estate agent jointly and severally liable for payment of the transfer tax. You know my position; it's unfair and inequitable because we have no control over the completion of the sale.

"I understand what the Government's doing. Effectively, it's going to squeeze the real estate agents to chase after the lawyers to make sure it gets done, getting us to do what the Department of Inland Revenue won't do. It sounds like it's changed slightly but, at the same time, I totally understand the Government's need to make sure they don't get defrauded out of taxes."

Reiterating that he was not seeking to blame or cast aspersions on attorneys, he added: "The completed conveyance, the transfer of title, is done by attorneys. The transfer of titles does not take place until such time as title is delivered to the buyer. We don't get involved in the transfer of title.

"All we've done is the business aspects of the transaction. In principle, we don't transfer title. That's handed off to the attorneys." Mr Morley, noting that it has been typically assumed that real estate deals take 90 days to close on average, questioned whether the 180 days now allowed for the payment of taxes and conveyance recording could result in some transactions taking nine months to close.

If that occurred, he added, there is concern that realtors could also have to wait nine months for their commission. "There was a lot of discussion, and BREA had its annual general meeting last week," he recalled. "Several members raised concerns as to whether it could create potential financial hardship for some realtors because are they in a position to wait nine months for their commission."

And Mr Morley said it was presently impossible to predict what impact the changes will have on the Bahamian real estate market and all its participants because "we don't know what processes are required". He added: "The devil is in the detail. All we know is that it appears to be tremendous upheaval.

"When the Government enacts laws, and when they are handed to the relevant departments, it's not always explained to the departments what the intent should be. It's left to the departments to make their own determination. I only hope the Government gives strategic guidance to the Department of Inland Revenue on how it should take place as we don't want to see any further delay or confusion as to what's been indicated...

"And hopefully they stick to the guidelines and don't change them without notice. Often-times they change them, people don't know and you're left scrambling to learn the system. It's disappointing. I understand the Government's needs, but there's got to be a simpler way of getting this done and holding those they believe are at fault, holding their feet to the fire, and not put pressure on those who are compliant," Mr Morley said.

"Why is it up to real estate agents to do that? The Government has the authority to do the investigation and prosecute people."