What is a Property Tax?
Property Tax in Jamaica is assessed on the unimproved value of the land. The unimproved value of land is defined as the price at which a seller could put up his land for sale without taking into consideration any improvements, physical additions or alterations to the land, such as buildings. In simple terms, the property tax is a charge levied on all commercial as well as residential property in Jamaica.
Property Evaluation Method
The property valuations in Jamaica are based on the unimproved value of the land. The unimproved value of the land is the price that the owner expects to receive if he were to sell the land alone. One has to disregard the value of any improvements like crops and buildings while evaluating the unimproved land value. Several factors determine the unimproved value of land such as
- the size of the parcel of land
- type of land
- the potential for development
- topography including the elevation and other surface features
- soil classification
- access to municipal & commercial services
- neighborhood characteristics
Who Will be Liable to Pay?
As per the Property Tax Act, the property tax is to be paid by any person in possession of the property at the date the property tax becomes due, regardless of whether or not that person(s) is the registered proprietor of the land.
Calculation of Property Tax
There was a time when the computation of property tax was much more complicated than it is now. In 2002, the Government modified property tax rates due to the significant increase in property values. The properties were grouped properties into different bands. The lowest band of properties valued $400,000 or less attracted a flat tax of $1000 per annum. Due to widespread unrest, there were again changes in tax rates in 2003 to provide relief to the taxpayers. The property tax was capped on the basis of different bands.
- Tax on property with unimproved value < $400,000 is $1000
- Tax on property with unimproved value $400,001 to $800,000 is 0.50%
- Tax on property with unimproved value $800,001 to $1,500,000 is 0.55%
- Tax on property with unimproved value $1,500,001 to $3,000,000 is 0.60%
- Tax on property with unimproved value $3,000,001 to $4,500,000 is 0.65%
- Tax on property with unimproved value $4,500,001 to $7,000,000 is 0.70%
- Tax on property with unimproved value $$7,000,001 to $12,000,000 is 0.75%
- Tax on property with unimproved value $12,000,001 to $30,000,000 is 0.80%
- Tax on property with unimproved value greater than $30,000,001 is 0.90%
Importance of Payment of Property Tax
Property taxes are used for financing property-related services in communities throughout Jamaica. It is used for
- Maintenance and expansion of street lighting and its maintenance.
- Solid waste collection and disposal.
- Administration of Local Authorities.
- Development of community infrastructure and civil improvements.
- Repairs to fire stations, and rehabilitation of local as well as farm roads.
Non-Payment of Property Tax
If the property is in possession of more than one person, the Collector of Taxes has the authority to enforce payment proceedings against all or any of the persons in possession of the property. Moreover, the collector can also seize and sell their goods in order to recover any outstanding property tax, interest, and penalty. Additionally, property in arrears for non-payment of property tax may be forfeited to the Government of Jamaica.