Institute of Surveyors: President should consult ISTT when appointing valuation members of Valuation Tribunal

The Institute of Surveyors of TT (ISTT) says recent amendments to the Valuation of Land Act should have included guidance on the appointment of valuation members to the Valuation Tribunal, which will replace the Tax Appeal Board.

ISTT president-elect Sunil Lalloo says, "Much in the same way that the chair is appointed on the advice of the JLSC (Judicial and Legal Service Commission), the valuation members ought to be appointed on the advice of the ISTT, which is the only local professional institution responsible for the validation of valuation surveying qualifications and experience."

In his June 6 statement, Lalloo also criticised the decision to alter the definition of owner so that squatters too would have to pay property tax.

"This is, conceptually and practically, a bad idea. Despite the fact that paying the tax does not, in itself, create a legal entitlement to land, it would complicate an already contentious area of land disputes. Taxing a squatter on the basis of his/her occupation of a specific parcel of land is an acknowledgement by the state that that asset – the squatter’s interest – is assessable for the purposes of taxation and therefore legitimate."

Lalloo argued doing so would create a new grey area in the formal/informal divide of property rights. "Considering the constraints already faced in land administration, it would add a further layer of unwelcomed complexity. It should therefore be discouraged at all costs."

Another area of concern to ISTT is the lack of information on how government intends to determine the annual rental value (ARV).

"There has been no official word on the methodology that would be utilised by the State to assess ARV. The method that is generally used in the private sector is a direct rental comparable approach. In this method, the property to be assessed would be compared to other properties that are currently being rented on the market. Doing a direct comparable approach for every property in the country would no doubt be laborious. It is therefore anticipated that the State would employ a simpler method."

Lalloo said although Computer-Aided Mass Appraisals (CAMA) is the modern approach to valuation for taxation purposes, "property in TT lack the level of homogeneity needed to make automated models like CAMA effective."

He argued that a tier-based system, which categorises property based on simple variables such as location, accommodation and size, with market-derived rental bands, would be the ideal approach for TT.

However Lalloo expressed concern about the evidentiary basis of rental value.

"Unlike sales, most rental transactions are not registered. It is therefore unclear what would be the source of data used by the State to guide the methodology employed and whether that data source would stand to scrutiny if challenged. In a recent High Court Judgement (Antoine v McKenzie), expert testimony on rental value was disregarded due to the lack of comparable evidence," Lalloo said.