Property Tax

Property tax, which is the largest single source of revenues for the local authorities has a targeted collection of $2.8 Billion to the end of the fiscal year (2012 – 2013) and revenue collections of $7.26 Billion in fiscal year 2013 – 2014. The collections for the new fiscal year are predicated on an improved compliance rate of 62% (on an increased property tax obligation) up from approximately 52% and arrears revenue realization of Two Billion Dollars.

At March 19, 2013 the collections amounted to $2.45 Billion which is $355 M below the target. Based on the current economic situation and the urgent need for all players to contribute to the government’s growth strategy, the Council will continue to work closely with Tax Administration Jamaica to improve the level of compliance and ensure that delinquent property owners meet their obligations.  The fact is, there is an ever increasing requirement for the Property Tax revenues to fund a much wider base of public services which in the new year will amount to over $8.0 Billion disaggregated as follows:-
 

In order to increase the likelihood of successfully reaching our target the following short-term measures were pursued aggressively between March and June 2013:

• A focused Public Education campaign;
• Increased compliance activities in targeted areas;
• Greater utilization of existing legislative measures such as levies;
• An amnesty in the new fiscal year;
• Implementation of agreed recommendations by Central and Local Government Authorities.

The intent of the short term measures is to ensure that at a minimum the target for this fiscal year is met and this will provide the correct momentum builder leading into the new fiscal year which will make a very challenging objective attainable.

Subject to Cabinet approval and the implementation of administrative changes primarily by the Ministry of Finance and Planning, the following measures will also be undertaken:

• The linking of the Tax Registration Number (TRN) with the property tax system, so as to enable better identification of delinquent property owners when they need to be found;
• The Stamp Office to enforce operational guidelines requiring proof of payment of property taxes prior to the stamping of sales agreements or the instruments of transfer;
• For arrears collections, ensure that the taxes which are earliest are the first collected and not the most recent;
• The Administrator General’s Department to remit taxes for estates under its’ jurisdiction on a timely basis;
• In order to obtain Tax Compliance Certificates (TCC), individuals and companies (and their subsidiaries) must provide a current Certificate of Payment of property taxes for all properties owned/occupied by them; 
• No approval of building plans or sub-division plans by the Local Authority without providing proof of a current Certificate of Payment of property taxes from the Tax Administration Jamaica;
• Declaration of Property Tax compliance should be part of the declaration by persons seeking and/or holding public offices.Implementation of an amnesty (suggested start date – July 2013) to run for a period not exceeding two months. The amnesty will involve the relief of all interests and penalties on the condition that all outstanding property taxes are paid within the amnesty period. 

A public education campaign that will be focused on the consequences of non-compliance, as well as celebrating the good impact that property taxes have on the economy.  With the need to negate public discontent arising from the increase in Property Tax rates, as well as to achieve success in our targeted endeavors, a sum of $25 Million will be required for the campaign. A public relations firm will be contracted to develop and implement the detailed programme.

FINANCIAL YEAR 2013 - 2014

The 2013-2014 financial year saw an increase in property tax which resulted in a collection target of $7.26 billion. The Ministry realised 80 per cent of the targeted amount which resulted in $5.83 billion in collections.  This achievement is substantial when compared to the targeted amount for the prior year which was $2.8 billion.  This achievement was due to the following measures that were implemented:

• Local compliance measures organised by the local authorities and the local TAJ offices  which  involved  outstation  collections  on  week-ends  in  remote communities and housing schemes, door to door visits to delinquent property owners, town hall meetings and community fairs;
• The implementation of an advertising campaign to increase communication with citizens on the importance of paying property tax and the use to which the property tax dollars are put by the respective local authorities;
• Active pursuit of delinquent property owners including court cases and where necessary, detention;
• Technological backing to support collections particularly in the remote collection areas and also to aid in the compliance efforts; and
• The training of 15 compliance officers and nine (9) Special Contract Officers recruited to improve collection rates.