Property tax win-win idea for all

THE EDITOR: What have the citizens of TT done to deserve this PNM Government? We have voted for them time after time, given them perks such as tens of thousands of dollars in allowances on top of their substantial salaries, and allowed these ungrateful civil servants to buy new luxury cars tax-free.

Yet they want to tax the beleaguered citizens – who pay their salaries – on their homes based on their presumed rental value – as absurd as that concept of valuation is. This means the tax rate of three per cent can be elevated whenever the authorities need more money to finance their already ridiculously high salaries plus benefits and continued mismanagement of the economy.

The Minister of Finance may ignominiously tell you that it is only three per cent, which the Government deserves, to protect you from crime and provide other essential services, such as water, electricity and fire protection, but how do people on a fixed income, already living on the edge because of escalating prices on everything from food to other essentials like electricity and water (it’s undeniable that utility rate increases are coming), find that extra money for this newly created expense?

According to expatfocus.com, “In the capital city of Port of Spain, the average monthly rent for a one-bedroom apartment is around $5,000-$7,000 (US$700-$1,000). A two-bedroom apartment in the city centre can cost anywhere from $7,000-$12,000 (US$1,000-$1,700) monthly.”

Moreover, “Outside of Port of Spain, rental prices are lower. In cities such as San Fernando and Chaguanas, the average monthly rent for a one-bedroom apartment is around $4,000-$6,000 (US$560-$840), while a two-bedroom apartment can cost anywhere from $6,000-$10,000 (US$840-$1,400) per month.”

Since the capital city of PoS has a more significant number of houses, the demand is higher than in other locations. The average rental price for a two-bedroom apartment of $9,500 is what taxes will be based upon. That works out – at a rate of three per cent – at a monthly tax of $585; annually, $7,020. What if the residents cannot afford the new tariffs and do not want to move from houses that have been in their families for generations?

In some countries, a revolutionary model has developed to counter gentrification as property developers, sometimes private and often government, cause escalating land prices, which can displace low-income residents. “Born out of the civil rights movement, a community land trust (CLT) is a non-profit that takes land off the speculative market to keep housing permanently affordable. The trust owns the land, while tenants can rent or own the buildings on top. Residents don’t pay rent to a landlord, and they share in the maintenance, upkeep and governance of the property together. It’s a move to bring back the decision-making power to the residents.”

“How each CLT functions is different,” said Kasey Ventura, an advocacy director at Beverly-Vermont, a 60-unit community land trust in Koreatown. “A common model is the limited equity housing co-operative. Residents purchase a share in the co-operative and commit to resell their share at a price based on a predetermined formula. Los Angeles is already home to a few community land trusts, including ones in El Sereno, Boyle Heights, and South LA” – LA Times.

“Owners of a co-op own shares of the co-operative instead of owning their unit outright, which would be the case in a condominium. With some co-ops, owners are allowed to sell their co-op shares in the open market, depending on the market rate for co-ops in that location, subject to approval by the co-op board” – Investopedia.

This idea is a win-win for everyone. Not only does the TT Government collect property taxes – which it is hell-bent on doing anyway – but the people can afford to live in the homes that their family has painstakingly and proudly acquired over the years without the heavy, burdensome taxation that could make them lose their cherished identity which they have worked long and hard to develop for their children and grandchildren.

Moreover, CLT can help low-income families nationwide, from PoS to San Fernando, Scarborough and, indeed, everywhere.

REX CHOOKOLINGO

rexchook@gmail.com