I have taken note of a letter written by Bernard Quesnel in your paper about property tax and it is clearly necessary to clarify the basis on which this tax will be charged.
The PP, in particular the COP, made a song and a dance about this tax in the 2010 general election and they were successful in misleading property owners into believing that the tax is based on the capital value of their properties.
However, the law is clear that the property tax is based on the rental value of properties and not the capital value. The three per cent tax in the case of residential properties, therefore, is thus applied to the assessed rental values, which in most cases will be lower than the actual market rentals.
The tax is therefore a fraction of what is being bandied about.
It is not $30,000 or $40,000 a year, which is what you get if you erroneously multiply the cost or capital value of your property by three per cent. Instead, for most property owners, it may be in the range of $1,200 to $1,500, or even less, since what you have to do to get an idea of what the tax will be is to multiply the annual rent for your property by three per cent.
I trust this clarifies the issue.
Colm Imbert,
Minister of Finance