Changes to Income and Property Tax Acts

7th April, 2009

In 2007 a number of changes were made to the two main legislations administered by this department, that is, the Income Tax Act and now the Income and Corporation Tax Act and the Property Tax Act. Some of the amendments were to reflect changes in government’s tax policies, to make the law clear and to remove ambiguity in interpretation. In addition, the changes enable the department to administer these laws more successfully.

Key amendments are summarized below:

Income Tax

Act Title
The name of the Act has been changed from Income Tax to Income and Corporation Tax Act

Exemptions
Travel and Entertainment allowances and gratuity are now exempt from tax for all recipients. Interest received on savings account and interest bearing deposits are now exempt from tax. Incomes arising from trading securities listed on the exchange licensed by the Eastern Caribbean Securities regulatory Commission are now exempt from tax.

Capital Expenditure
Commercials Buildings constructed after March 31, 2003 are now entitled to an annual deduction for wear and tear of 5% of the cost of the building.

Pensions
The exemption level for pensions was increased from 36,000 to 60,000. Pensions above 60,000 would now be taxed at 5%

Mortgage Interest Allowance
The allowance in respect of Mortgage Interest payments has increased from a maximum of 5000.00 to 8000.00

Company Tax Rate
The section that authorized the application of a surcharge on Company assessments was repealed. However, the effective rate of tax on a Company remains 30%.

Property Tax

Tax Certificate
There is now a requirement for the presentation of a tax certificate to the Registrar of Lands before any property is transferred or mutated.

Habitability Certificate
The Valuation Officer is now required to present a ‘Certificate of Habitability’ to a property owner as soon as he declares the property habitable.

Commercial Building Rebate
Commercial Buildings constructed during the years 2005 to 2007 and later will be entitled to 5 years exemption from Property Tax on the building. Immediately following the five years exemption the Property Tax will be rebated by 25% for each of the five years immediately following the period of exemption until the year 2010.

Residential Building
The taxable value of a property includes the value of a dwelling house. Prior to 2008 the deduction for a dwelling house was 50,000. This was increased to 150,000.

Property Tax Relief Board
A Property Tax Relief Board was set up where persons liable to pay Property Tax may appeal for relief provided that the circumstances leading to the request for relief are just and equitable..