Home' Trinidad and Tobago Guardian : April 26th 2015 Contents Wallace is a 32
es. He and
for a house, to settle down and to start a
family of their own. On his currently salary,
he said, he qualifies for a house worth just
under $500,000. Wallace has spent his life
in west Trinidad and wants to continue living
there. But even a lot of land there cost well
above $500,000 let alone a home.
It is a subject the Sunday BG has explored
before, the inability of those in T&T's middle
class and middle-income brackets to qualify
for mortgages for the homes they want, in
locations in which they want to live. This
week, the Sunday BG raises another potential
consideration: the return of property tax.
Wallace is resigned to the introducion of
property tax, "I have seen where the gov-
ernment is spending, where it is going and
what it is being spent on. I was expecting
the property tax to kick in anyway."
For couples struggling to save for down-
payments, a reintroduction of property tax
would represent an additional cost which,
depending on their income, may push home-
ownership even further out of their reach.
Responding to a question posed by Jack
Warner, Chaguanas West MP in February,
Prime Minister Persad-Bissessar said that
her government has no plans to bring back
the tax to supplement declining energy rev-
But the return of the tax may not be up
to the Prime Minister. With an election due
this year, the government may change. If oil
remains under US$65 a barrel, the need to
consider other revenue-raising measures may
become a possibility.
How much of a cost?
Stephen Kangal was a well-known com-
mentator on property tax matters during the
days of the Axe the Tax campaign in 2009
and 2010. Then, he was against the reformed
2009 tax as would have been introduced by
the then PNM government had it won that
Kangal said his primary objection to the
tax back then was the exorbitant increase
under the 2009 provisions.
Kangal, who lives in Chaguanas, said under
the Land and Building Tax of 1948, his home,
built in 1968, would have drawn a negligible
fee. The 1948 legislation calculated the tax
at 7.5 per cent of the home's annual rental
value and set a separate fee for the lands on
which the house was built.
"My assessment value was $300 at the
time when our house was built, so I was pay-
ing $32.50 for house tax and since I had a
lot of land anything less than an acre was
ten dollars," said Kangal.
Under the 2009 legislation, however, Kangal
said the increase in his tax amounted to thou-
sands of dollars, even though the percentage
was reduced to 3 per cent and the land and
house payment were amalgamated.
"My house presently has a rental value
closer to $7,000 a month," said Kangal, "If
I apply the three percent, I go from $32.50
a year to $2,200, possibly more."
By the Sunday BG's calculation, the new
tax amount would, in fact, be $2,520.
Kangal said his three-bedroom home is
worth $2.5 million in today's market, similar
to several homes Wallace and his fiancee
would find suitable in west Trinidad.
Using the online mortgage calculators of
several local banks and assuming an interest
rate of 6 per cent with a downpayment of
10 per cent and 30 years to repay, Wallace
and his fiancee could expect to pay a mortgage
between $10,000 and $14,000.
With an combined income of $20,000, the
couple would find such payments a stretch.
Assuming a reintroduced property tax of
$2,520, based on the rental value of Kangal's
home, the couple will have to find an addi-
tional $210 every month.
"I have about $25,000 saved and that
wasn't from my government salary but doing
jobs for people. My government salary pays
my bills. That's all it could do anyway," said
He is a qualified audio technician. It is the
income he earns from doing recordings that
gets him the extras he may need.
So far, he has purchased $35,000 worth of
recording equipment as well as $70,000 worth
of tools to make jewelry, another side business
he has entered.
But it is evident, even to Wallace, that a
great many private jobs will be needed to
make a mortgage of $13,000 every month.
Next week, we return to the issue of property
tax and prospective first time home owners.
Would HDC housing fill their need and are
servicemen getting their allocation from the
national housing stock?
Will HDC homes, now currently exempt
from property taxes, be subject to them in the
What is the likelihood that the tax may
return at all?
In next week's edition of the Sunday
BG, we speak to Jearlean John of the HDC,
Ingrid Lashley of the T&T Mortgage Finance
Company, Christine Sahadeo, former PNM
senator and finance minister, and Stephen
SBG6 PERSONAL FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt APRIL 26 • 2015
Returning to property tax?
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