Dillon-Remy: Implement property tax gradually

In her contribution to the Valuation of Land (Amendment) Bill 2023, Independent Senator Maria Dillon-Remy said the tax should be implemented gradually, starting at one per cent and increasing to three per cent over a period of time.

Speaking in the Senate on Friday, Dillon-Remy said she was also concerned about the timing of the imposition of the tax, and noted that business leaders were unsure if this would lead to a decrease in investment.

She said while she was pleased to hear people would be able to defer paying the tax, the fact that it was a deferral and not a waiver left her wondering what would happen if people were not able to pay.

She said while she understood the figure of $18,000 was set to allow government to collect a specific amount of tax monthly/yearly, it would be better to allow people to pay tax on the actual value of the property. She said Section 17 of the Valuations Act allows people to file objections if they were not satisfied with their valuations.

“I think it’s a good idea for the corporations to be collecting the taxes, and I understand that they will also be receiving taxes from commercial, industrial, and agricultural categories. I’m concerned about corporations in rural areas, will they collect enough residential taxes to do the work they have to do? A lot of work has to be done by the corporation, so if they don’t collect enough for the amount of work they have to do, you might not get the output you want, and government may have to supplement from the consolidated fund.”

Government Senator Allyson West reminded that the UNC had planned to implement a land and building tax while in office, and said whether it was called property tax or land and building tax, it was still a tax on property.

She said since local government elections were coming up, and government was implementing reform, the tax on residential properties was being stated so the regional corporations could have all the funds they were legally entitled to.

West said the hope was that once the regional corporations began to benefit from the collection of the taxes, they would become an unofficial agent of the commissioner of valuations, and bring more people onto the valuation roll.

She said the funds collected from taxes would help the regional corporations form the additional units they would need to fulfill their new responsibilities, such as monitoring and evaluation, municipal police, disaster management, etc.

Opposition Senator Damien Lyder said clause three of the bill, which amends the Land Valuation Act to say “the annual rental value means an estimate of the annual rental value” introduces an element of subjectivity into the valuation process.

He also said a harsh impact could be caused by Clause 4 which states that the commissioner of valuations can record the annual rental value of land at $18,000 if after reviewing a return he is of the opinion that the annual rental value of the land is below $18,000.

Lyder said government risks creating an uneven playing field if it bases the average valuation on the evaluations of 50 per cent of residential, commercial, industrial, and agricultural properties. He asked how far government had reached in evaluating the latter three categories.

Lyder said in areas such as San Juan where businesses and residences were closely intertwined, commercial taxes should also go to the regional corporations, as the businesses were otherwise a drain on the resources of the corporations.

Minister in the Ministry of Agriculture, Land, and Fisheries Avinash Singh said growing up in a farming family, he remembered having to present a land tax receipt in order to be acknowledged by the state as a registered farmer and to be able to access the 92 incentives offered to farmers by the government.