“The policy of government is very clear on this”
Johnson: Govt does not want to take that “extreme position” but does have the right to if necessary
NASSAU, BAHAMAS — Commercial property owners who are delinquent with their real property tax payments were urged yesterday to work out an arrangement with the Department of Inland Revenue (DIR) to settle their outstanding debt, with Acting Financial Secretary Marlon Johnson noting that the government has the power to garnish their rental income.
While addressing a post-budget press conference yesterday, Johnson said: “We want to encourage all commercial property owners to come into the Department of Inland Revenue if you owe real property tax and work out an arrangement. The policy of government is very clear on this.
“It isn’t really the intention of the government to seize property and sell it. That’s really an extreme position. If you do owe real property tax, you should come in. The law does allow government right now to garnish rent. That facility exists in law. What the amendment proposes is for Parliament to create the framework for this to happen.”
During his 2021-2022 budget communication on Wednesday, Prime Minister Dr Hubert Minnis said tenants in commercial office and retail properties owing substantial real property tax arrears will have to pay their monthly rents to the DIR rather than their delinquent landlord until the debt is settled.
Minnis noted: “We are introducing legislative amendments to improve real property tax collections for commercial properties. We have had situations where owners of significant commercial properties collect substantial rent from businesses but are delinquent in the payment of taxes.”
He added: “The legislative enhancements will permit the government to have those rents paid to the Department of Inland Revenue for delinquent commercial property tax owners.”
Johnson also noted yesterday that based on projections, the government has foregone some $25 million in revenue thus far and, with the new measures announced in the budget communication, is likely to forego some $54 million.
Minnis noted on Wednesday that his administration has made several statements regarding the “untapped potential” of the vacation homes market and the millions of tax dollars that go uncollected each year.
“We are amending the law to clarify that all vacation home marketplaces, such as AirBnB and VRBO, are required to pay VAT (value-added tax) on rentals and commissions,” said Minnis.
Johnson said yesterday that the government will start discussions with home rental marketplaces next week on the issue.
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