Halkitis on real property tax: Govt targeting foreign, commercial property owners
$226 mil. in real property tax owed by foreigners, $235 mil. owed on commercial properties
Seeking to dispel fears that the Department of Inland Revenue (DIR) is targeting the average Bahamian who is delinquent with real property tax payments, Minister of Economic Affairs Michael Halkitis said yesterday that the government is primarily targeting foreign and commercial property owners who owe the majority of the $822,167,685 in real property tax arrears currently on the books.
Earlier this month, the DIR placed a newspaper advertisement warning that “Real property tax accounts classified as commercial, residential, foreign-owned vacant land, or foreign-owned, owner-occupied properties that have been in arrears for more than seven months may be eligible for power of sale.”
It sparked fear in some circles, with Free National Movement (FNM) Chairman Dr. Duane Sands accusing the government of executing a money grab via the collection of taxes from Bahamian property owners.
Speaking during a press briefing at the Office of the Prime Minister, Halkitis said $226 million is owed by foreigners and another $235 million is owed on commercial properties.
“That is properties that are either businesses or are being rented and are generating income,” Halkitis said.
“Imagine if we could collect all $822 million. That’s probably not possible, but we can collect a significant portion of it.
“And our view is, particularly as it relates to foreign property owners, we are upping our efforts. What you saw was mainly targeted at chronic delinquents, who have been delinquent for years. I think there might have been some misinterpretation that this means the government would be coming after Bahamian homeowners.”
Halkitis said of that $822 million, only $155 million is owed for owner occupied properties – the category in which the majority of Bahamians fall.
Halkitis noted the DIR has been very accommodating to property owners who query their taxes owed, but noted there is a serious problem with the high level of delinquency, particularly in regards to foreign-owned properties.
“It’s a big problem. A huge chunk of it is owed by foreigners. We are engaged in some activities now to go after them, and that is where our efforts will be targeted in the main,” he said.
“The department has been very accommodating in terms of people who have questions or who have objections in terms of their taxes. So I wanted to say that we have a huge issue that we want to address and when we come to certain categories, particularly when we talk about foreign-owned properties, where there has been some stubbornness in getting the number down, then we have to move from the level of asking to the level of being able to use some of the powers we have. That was in no way targeted at Bahamian homeowners, and I think in some quarters the fear was generated that the government was coming to get your house.”
The DIR has in recent months become increasingly aggressive and has warned delinquent taxpayers that they face action.
Earlier this month, the DIR told The Nassau Guardian that it has started garnishing the bank accounts of businesses that are severely in arrears and have not made arrangements to correct their debt to the government, but noted that is only being done in only the most extreme circumstances.
