Homeowners want clarity on erratic property tax valuation

Property owners say while they appreciate the Finance Minister’s proposal to decrease the property tax by one per cent, the percentage was never a problem. The issue, they said, was with the valuation of their properties and the lack of transparency about the way it was calculated.

Property tax is based on a percentage of the Annual Rental Value (ARV) of a property after a deduction of ten per cent for voids. For residential properties, the government has proposed to reduce the tax from three or two per cent and vacant residential land is 3.5 per cent.

Commercial property tax is five per cent, industrial with buildings is six per cent, industrial without buildings is three per cent, vacant commercial and industrial is five per cent, agricultural is one per cent and vacant agricultural is two per cent. The government moved to begin collecting only from residential properties in 2024.

The proposed amendments, if approved, will extend the time for the Valuation Division and the Board of Inland Revenue to complete their work, and give homeowners up to six months to lodge complaints.

According to the Office of the Prime Minister website, the rental value is a calculation of the rent the property would obtain on the open market if it were put up for rent.

“The qualified professionals at the Valuation Division of the Ministry of Finance are responsible for calculating the Annual Rental Value of properties based on the following established criteria: Location of the Property (Neighbourhood); Classification of the Property (Executive, Modern, Standard [I & II]); Category of the Property (Agricultural, Commercial, Residential, Industrial); Dimensions – Property Floor Area; Modifications to the particular property.”

But exactly how the ARV is calculated is still a mystery and many are complaining of exorbitant amounts for simple homes or widely varying amounts on different notices for the same location.

Afra Raymond, managing director of Raymond & Pierre Ltd, a company of chartered valuation surveyors, real estate agents and property consultants, said there were so many discrepancies because of the “mass valuation” approach which would produce a certain percentage of “erratic” valuations.

He added that, in his opinion, viewing the outside of a building to evaluate it was an acceptable way for the government to do so as there were many properties to get through.

“It is plainly impossible for the Valuation Division to inspect and measure each property which is to be taxed, so the approach has to be a crowd-sourced one in which the inevitable objections, and the resolution of those objections, refine the initially imperfect Valuation Roll. The Valuation Roll is the database which shows each property and is intended to allow the comparison of the properties/assessments.”

He also spoke to the Property Tax Act amendment tabled in Parliament on March 15 which sought to reduce residential tax from three to two per cent and includes a section that would extend the BIR’s deadline to issue notices of assessment to June 30 for this year only.

It also extends the objection period from 30 days to six months, which would allow the Finance Minister to amend schedules for certain acts, and made it so that Parliament would have to actively prevent the minister from making such changes rather than his needing the Parliament’s permission to do so.

He said the extension was a valuable opportunity for the government to fix some of the defects of the current arrangements, especially that of the Valuation Roll and the use of agents.

He said six of the ten grounds for objection listed at the back of the printed notices of valuation refer to the Valuation Roll, but it was unavailable to taxpayers or the public.

“I have been told by the senior official there that the roll cannot be disclosed due to its conflict with the Data Protection Act. The details in the Valuation Roll are all already published in the Registrar General’s online database of registered deeds and RPO documents, save and except for the actual property-tax amounts.

“If this fundamental defect is not rectified, it is my view that the property tax could be effectively inoperable and vulnerable to judicial review as defective/unfair legislation, perhaps even to the extent of its being declared unconstitutional.”

In addition, he suggested that agents be allowed to lodge an objection with written authorisation from the taxpayer. He said, at the initial stage, either taxpayers or their agents could file property-tax returns, so it is unacceptable that only the taxpayer may lodge an objection.

During the Conversations with the Prime Minister forum at Skiffle Bunch Panyard, Coffee Street, San Fernando, on March 5, PM Rowley addressed concerns about the valuations.

He said, “Provision in the law is there for if a person genuinely believes that the valuation, that rentable value, is out of wack, that you could go make a complaint to the tribunal. But it’s in a system of comply and complain. Because if we say, ‘complain and doh pay,’ then everybody will not pay and complain.

“But if it’s a system of comply and complain, you pay it, you’re complaining, the tribunal will look at it and if the tribunal reviews it, then you get a credit towards the next year’s tax.”

However, according to MP for Barataria/San Juan Saddam Hosein, the Valuation Tribunal had not yet been appointed.

Speaking at a UNC press conference on March 10, Hosein said he had written to President Christine Kangaloo to enquire on the tribunal’s status and she confirmed she had not appointed a Valuation Tribunal.

A man from Maraval complained he had four notices of valuation addressed to him even though he only had two properties.

He said he received two valuations for the property he lived in that had vastly different ARVs and a valuation, in his name, for a property he never owned. He said one of the notices of valuation for his home listed “Apartment 1” and “Apartment 2” even though it was one building.

“For my home, one of the notices said the ARV of one of the apartments was $280,000 which means, per month, it’s over $20,000 in rent. I say that can’t be my place either. I don’t know what going on, but that’s the kind of craziness we going through.”

Also, at his second property, a neighbour got a valuation for his building and the ARV was different from the one he received.

He recalled the valuator visited and asked how many rooms were in the house and took pictures of the outdoors, but he did not know how his second property was evaluated as neither he nor his family was there to open the building to a valuator or answer any questions.

“Look, I have no problem paying the tax, but the valuation is all over the place. You can’t tell me you watch a picture of a man’s place and decide the value. They don’t know, and not asking you how old the house is or if your roof rotting. Just because it’s looking nice doesn’t mean it’s in the best shape.

“And the Prime Minister is saying comply, then complain. So what? I have to pay four sets of taxes and hope they figure it out, if ever? What do I do if the next year comes and they haven’t addressed the discrepancies? Pay again? Just because you own property doesn’t mean you rich and have money to waste.”

He said he sent an e-mail to the Commissioner of Valuations but had not yet received a reply.

A Diego Martin homeowner recalled she went to the Ministry of Finance office to submit her valuation return form in May 2017 and submitted a deed, a WASA bill, an electricity bill, previous land and building tax receipts and photos of the property.

At some point between then and 2021, a valuation officer visited the property, which had four apartments. Because the property was tenanted, he was not able to go inside, but he looked around outside. She was never given a copy of that valuation report.

She received a notice of valuation dated October 2023, which she did not receive until December of that year because she was not in the country to sign for it. It stated that ARV was $180,072 or $15,000 per month and she had 30 days to appeal to the Commissioner of Valuations.

“By the time I got that letter my 30 days long gone. What am I supposed to do now? How they reach that mystical figure? They plucked it out of the air? The actual rental being received is about $165,000. Where is the other $15,000 per year coming from?

“Property tax should be based on square footage of an apartment or the land a building is on or something like that. That should be valued, not what I could be earning on the property.

"Rental values have dropped. I can’t get $5,000 for a three-bedroom apartment any more. People can’t afford that! Why are you taxing me on something I’m not getting?”

She said she did not mind paying the property tax but the ARV should be realistic and based on facts.

A Petit Valley property owner said she filed her return in October 2022 and received a notice of assessment from the Board of Inland Revenue (BIR) about two weeks ago, but never got a notice of valuation from the Finance Ministry.

She said her property had two units, upstairs and downstairs as well as a utility space or attic, but the building was incomplete. She said in her return, she submitted floor plans for the building which clearly indicated the attic was storage space, and a survey plan.

She added no one ever visited the property, but a neighbour told her a man who said he was from the Valuation Division had once stood in the road and looked at the house.

The assessment said the ARV for downstairs was around $36,000, or $3,000 a month, and upstairs was $132,000 or $11,000 a month, bringing her tax to about $4,600 a year. She said a private ARV assessment she had done in 2017 was much less than the Valuation Division’s.

“I looked at the difference between the valuations between the first and second storeys. The attic is not considered to be living space because the ceilings are not high enough, but I realise they have valued upstairs as if the attic is living space.”

She had to visit the Valuation Division head office in Barataria to get the notice of valuation and file an objection, as well as the BIR to file another objection to the assessment.

She complained the BIR gave her no receipt stating an objection had been filed, so she had no proof she made the objection in the allotted time.

“And while I have to object within a certain time frame, they have up to a year to reply. But the deadline for tax payment is in September, three months before the end of the year. What is that? So we have to pay tax, in advance, around the same time people just put out a set of money to send their children to school.”

On his Facebook page, vice president of the Aranguez Community Council and former councillor for San Juan East Safraz Ali highlighted a pensioner who received a $7,700 annual tax assessment for a two-bedroom house in Aranguez.

He told Newsday the 67-year-old owner lives alone and her only income is her pension. She was very worried about how she would pay her taxes.

“The house is a basic two-bedroom house. It doesn’t even have a gallery. And you want to tell me you assessed this lady’s house to have a monthly rental value of $23,764? How in this day and age a two-bedroom flat home in Aranguez can get a rental of $23,000 a month? That is an advantage!

“In her old age, when she should be kicking back and relaxing, she is stressing out because of something the government is doing. She is worried that she could lose her house to the government for not paying property tax. She doesn’t know what to do.”

According to the Inland Revenue Division of the Finance Ministry website, if a person does not pay their property tax by the September 30 deadline, there will be a ten per cent interest penalty.

“Interest at the rate of 15 per cent per annum will be charged on the increased amount (this includes any part of the unpaid principal in addition to the penalty) from October 1, 2025, the date of payment.”

It added that the BIR could take legal action to recover the taxes owed and was entitled to seize any moveable goods and possessions.

However, it continued, if a person was genuinely unable to pay the tax, the owner could apply to the BIR for a deferral of the payment.

The application, which covered two years, had to include proof that the applicant was in receipt of a public assistance grant, a disability grant, a senior citizens’ pension from the State, a TT conditional cash transfer card from the State or did not receive an annual income exceeding the maximum amount for state pensions.