FEW ISSUES have proven as politically charged and enduringly divisive in TT as property tax.
For over three decades, successive administrations have grappled with its implementation, suspension and reform – each attempt reigniting fierce public debate.
Now, with over $135 million collected and the current government’s decision to scrap the tax, questions of fiscal transparency, accountability and economic prudence once again dominate national discourse.
Globally, property taxes are a foundational element of public finance.
According to the Organisation for Economic Co-operation and Development (OECD), these taxes account for roughly two per cent of gross domestic product in member countries, funding essential services such as road maintenance, waste management, local infrastructure and public safety. According to the OECD’s 2023 Revenue Statistics, countries like the UK and Canada surpass three per cent.
In most developed economies – including the UK, Canada, and Singapore – property taxes are levied by local or municipal authorities, ensuring decentralised governance and stable revenue streams.
Dr Jamelia Harris, a UK-based economist and Newsday guest columnist, contextualised this in a piece published on May 28.
She wrote, “The OECD notes that across all of Europe only two countries do not levy property tax: Liechtenstein and Malta. There are over 40 countries in Europe.”
Harris argued that property tax is economically sound, as it is “least distortionary,” unlikely to alter behaviour significantly, and capable of providing reliable revenue, provided political will and public trust exist.
TT’s property tax saga formally began with the Property Tax Act of 2009, introduced by then finance minister Karen Nunez-Tesheira. It aimed to modernise the existing Land and Building Taxes Act (LBT Act), standardising rates and updating valuations based on current market values.
The policy’s introduction, however, coincided with economic uncertainty, and public backlash was swift.
Fearing increased financial burdens, homeowners resisted and successive governments vacillated on enforcement.
By 2010, the newly elected People’s Partnership administration suspended the new regime, reverting to the outdated LBT framework, a stopgap that reportedly left regional corporations chronically underfunded.
In 2017, the then Keith Rowley administration revived the initiative, initiating nationwide valuations. While public resistance persisted, over 132,000 property owners eventually complied, and by May 2025, the government had collected $135,634,712.48 in property tax payments from over 132,000 transactions, representing approximately 69.25 per cent of the total $195,841,455 assessed value.
How much was collected, and where
Detailed figures reveal that Tunapuna/Piarco led collections with $23,245,091.33, accounting for 70.99 per cent of its assessed value. Diego Martin followed with $16,947,358.98, and Couva-Tabaquite-Talparo with $16,756,360.91.
In contrast, Rio Claro-Mayaro recorded the lowest compliance rate, collecting 48.7 per cent of its assessed taxes. The Tobago House of Assembly also collected $4,061,066.11 from 4,267 payments, with a compliance rate of 60.85 per cent.
Finance Minister Davendranath Tancoo initially pledged refunds to those who paid – a declaration later rubbished by the Prime Minister herself.
“I told people don’t pay it. You decided to pay, that is on you,” Kamla Persad-Bissessar said at a post-cabinet briefing.
The PM also raised questions concerning the whereabouts of the collections.
Former finance minister Colm Imbert swiftly responded, dismissing these concerns as “senseless.”
He said the revenue had been deposited into the Consolidated Fund, the government’s primary bank account at the Central Bank, as mandated by the Constitution and the Exchequer and Audit Act.
“That question didn’t make any sense. The money went into the Consolidated Fund. That’s public knowledge,” Imbert said.
By law, all state-collected revenue — from taxes, customs duties, royalties and fees — is required to be paid into this central account. Disbursements for municipal corporations, as for all public expenditure, require parliamentary approval through the national budget or supplementary appropriation.
At its core, some argue the debate is not about missing funds but about public perception and the credibility of fiscal policy.
While property taxes were initially promoted as direct funding for regional corporations, operationally, the money was always routed through the Consolidated Fund. Some suggest it creates a misleading public narrative.
Former local government minister Faris Al-Rawi reinforced this procedural norm, adding that logistical limitations – including security infrastructure, vaults, cash handling systems, and audit controls – prevented corporations from collecting taxes directly.
Imbert has asserted that “no corporation, including all seven UNC corporations, ever collected property tax. It was all collected by the treasury and went into the Consolidated Fund.”
Al-Rawi noted that this design was acknowledged through legislative amendments passed in 2018, 2021, 2023 and 2024. These were intended to operationalise the tax and eventually channel revenue to regional corporations as part of a broader local government reform agenda. However, by the time of the announcement that it would be repealed in 2025, none of the collected property tax revenue had been disbursed to corporations.
Minister of Rural Development and Local Government Khadijah Ameen has since assured that regional corporations will receive adequate funding through the national budget, without the property tax.
Speaking at an Indian Arrival Day celebration in Ste Madeleine on May 25, she accused the previous administration of systematically weakening local government. “You denied them the resources; you denied them the money and then attacked them for not performing,” Ameen alleged.
Al-Rawi countered, stating that the current budget explicitly outlined plans to allocate a portion of property tax revenue to municipal corporations.
However, he added that the collection and disbursement of those taxes remained the responsibility of the Ministry of Finance. Al-Rawi also called for fairness in the debate, suggesting that Ameen was still adjusting to her new role and had erred in her remarks.
What the experts say
Economists and politicians have shared a range of views on the tax’s merits.
Harris took a structural approach in her recent column. She highlighted five core challenges undermining tax policy in TT: low tax compliance, a weak social contract, reluctance to diversify revenue streams, poor enforcement, and the absence of incentives for lawful taxpayers.
“If the only thing we are willing to change is our government, and not the underlying structures of our economy, fiscal system and society, then our quest for development will be elusive,” Harris concluded.
Economist Marlene Attzs has also highlighted the fiscal challenges facing the new UNC administration. Speaking after the UNC’s April 28 election victory, Attzs said, “The new administration also should address the fiscal imbalance and outline clear strategies to close the fiscal gap given their commitments to remove revenue-generating taxes such as the seven per cent online tax and the property tax.”
Attzs stressed the need for clear communication and fiscal discipline from the government, particularly regarding the removal of property tax and other revenue measures.
Former Central Bank governor and finance minister Winston Dookeran declined a formal interview but told Business Day he found Harris’ article “thorough” and that it “painted a holistic picture of the issue.”
Some experts have suggested alternatives to property tax for funding local government: reviving the Land and Building Taxes Act with updated valuations but lower rates to reduce public resistance; introducing service fees for municipal services such as waste disposal and public facility maintenance; and implementing phased taxation models with exemptions for lower-value properties and gradual rate increases over time.
Underlying the policy debate is a deeper cultural issue: tax aversion. As Harris noted, TT’s tax compliance appetite is significantly lower than in developed economies. Corruption and mismanagement perceptions further erode public trust.
“The residential rate of the property tax in TT is two per cent, reduced from three per cent. The understanding in most developed countries is that to fund public goods and services taxes must be paid. This social contract is not very strong in TT,” she wrote.
“There are multiple reasons for the breakdown of this social contract – top of the list are corruption and mismanagement. Also on this list is the belief by some citizens of their right to public goods and services, but not their responsibility for paying into the collective pot.”
This disconnect is compounded by weak enforcement mechanisms.
While thousands of homeowners complied, a significant proportion did not, without facing consequences.
“We are a society with poor enforcement of laws. We see this daily. With the property tax, a large share of residents did not pay the tax. The consequences: nothing. In most developed countries, non-payment of tax is met with a warning, a fine, and, at worse, prison time.”
Possibly most concerning, she added, “We do not reward playing by the rules. In contrast to the group that did not pay, the other share of the population duly complied with the law and paid their taxes. Finance Minister Davendranath Tancoo promised a refund; which the Prime Minister swiftly refuted.”
With property tax to be officially repealed, regional corporations’ fiscal dependence on central government subventions will persist.
As of May 28, no formal replacement mechanism for local government revenue has been presented by the Ministry of Finance.
Ameen insists that adequate allocations will be made in upcoming budgets. However, experts caution that without a dedicated, reliable revenue stream, local governments risk remaining financially and operationally hamstrung.
The property tax saga appears emblematic of TT’s wider governance challenges: a disconnect between policy intent and implementation, public distrust of fiscal measures, and a political culture where major economic decisions are often casualties of partisanship.
“We want to be more developed. We want progress. But progress requires change,” Harris wrote.
