Scotiabank investment expert – property tax could encourage commercial use

Implementation of a property tax could allow owners of derelict land to put their property to better use, said Scotia Bank’s senior manager, investment, Christopher Clarke.

He made the statement while fielding questions during the bank's Insights webinar on Tuesday.

“People tend to hold on to properties for a long time and not use them,” Clarke said. “Having that sort of property would come at a cost so it will make people evaluate whether that property is worth it to them.”

He said the tax would prompt people to consider developing their property commercially or pass it on to someone who will.

“Attaching a small cost to ownership of a property would help redistribute the resources more efficiently and allocate resources more effectively in the economy so that the people who in the end would own these properties would make the best use of them – and that would be in the nation’s best interest,” he said.

Clarke added that property tax is something that is not new. It is something that is experienced in most markets in the world. He added that people paid property tax up until a few years ago

"So it has been suspended more than terminated.”

He said the tax could have an initial cost to owners but it would benefit the country as a whole in the long run.

“Those companies that have a large physical footprint if they are owners of properties in TT it would represent an initial expense,” he said. “But from a broader standpoint in the economy what the additional revenue can do for the government in terms of developing the economy with a digital thrust, the additional resources that they would have at their disposal to then do that would be significant.”

Asked whether TT would see more lockdowns in the near future, Clarke said because of TT’s financial standing and possibilities for growth in the energy sector, it would be unlikely that government again resorts to locking down the country once more.

“We have been through the worst of it,” he said. With international reserves we have over $7 billion or 8.1 months of import cover. Given the strong fiscal buffers we have and with the economic growth and energy prices in the coming 12 months, personally I don’t see it as very likely.”