The value-added tax (VAT) break for real property sales on the islands and cays impacted by Hurricane Dorian will be implemented on a sliding scale, the Department of Inland Revenue (DIR) revealed yesterday.
Acting DIR Comptroller Gaynell Rolle said the government is cognizant that there may be many residents who do not want to return to live on their respective islands after experiencing the devastating storm.
“On the sale of real property, what the government is trying to encourage is, we know that there are a lot of properties within the Abacos and in Grand Bahama that persons say ‘we want to sell the property, we don’t want to stay here any longer’, or they have vacant land that persons would want to go now and develop within the Abaco Islands,” Rolle said
“On the sale of those properties, depending on the purchase value of those properties, the government is offering a sliding scale up to 50 percent on the purchase of those properties, so your tax benefit is that the tax relief on the payment would be less, on a scale up to 50 percent.”
The VAT discount on real property transactions is one of six tax benefits that will come into force on December 1 as a part of government’s special economic recovery zones (SERZ) order.
The 50 percent discount would be applied to the lowest grouping of property values, Rolle noted.
“For example, a property for a consideration of $0 to $100,000 has a VAT value of $2,500 that would be discounted up to 50 percent, which is a maximum saving of $1,250,” she said.
The government removed stamp tax on real estate transactions and replaced it with VAT during the last budget.