Bahamas Real Estate Association Lobbies for Tax Reform

The Bahamas Real Estate Association (BREA) is lobbying the Bahamas government to lift a $35,000 real property tax ceiling.
The ceiling could result in higher real estate tax payments for wealthy second home owners in the Bahamas, especially in the islands of Abaco, Eleuthera, Harbour Island, Exuma and Nassau where there are thriving second home communities.
BREA president William Wong said Zhivargo Laing, the junior minister of finance, assured him the Bahamas government would take into account the Bahamas Real Estate Association's concerns in the upcoming national budget exercise.
While making no promises, Wong said Laing was very accommodating.
Rescinding the real estate property tax ceiling corresponded with a revaluation exercise conducted by the Bahamas' real property tax department.
Wong admitted that many properties were undervalued and the subsequent new rates of taxation have drawn some criticism.
The Bahamas Real Estate Association, he added, realises the government has to deal with revenue issues, especially during this challenging economic period.
(Source – The Tribune of Nassau)
We make the following observations.
The north eastern United States, particularly Connecticut, draw very high property taxes so our American friends are familiar with property tax.
The problem is that many of the second homes in the Bahamas were undervalued for a long period and so, the owners were under charged. Also, many owners have been paying based on owner occupancy, when in fact they were part time occupants.
Homes must be occupied for at least nine months a year to qualify for owner occupancy rates.
Looking for the silver lining behind the cloud, we're grateful that our clients were able to benefit from the $35,000 ceiling over all the years it was in place.
It's unfortunate that this has occurred at a time when so many people have been affected by the global downturn.
And it's our sincere hope that while the removal of the ceiling may be problematic, our proximity to the U.S. mainland and all that we have to offer will compensate for any real property tax increase.
In the meantime, we will keep you informed of any developments in the arena.