Ministry: ‘Government Can Ill Afford Such A Loss’

December 18, 2015

“Measures taken to Parliament that will change land tax rates are designed to ensure no loss of revenue to the Government,” Minister of Finance Bob Richards stated today.

A statement from the Ministry said, “Land taxes paid by land owners are calculated by multiplying the assessed ARV times the tax rate. ARV’s have fallen significantly due to the extended recession.

“If tax rates remained unchanged, Government revenues would have declined by more than $19 million. Government can ill afford such a loss. The increase in rates, based on the lower ARV’s, eliminates that loss.”

Minister Richards said the “adjustment in land tax rates is fair to all sectors of the real estate market and was necessary to maintain Government services at a reasonable level and to avoid financial failure.”

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Comments (18)

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  1. Triangle Drifter says:

    It is no secret who is resonsible for so many to lose so much on the value of their property. It is no secret who is responsible for the exodus of IB jobs taking rent money & demand for rentals with them.

    Yes, government needs the money. Needs it in the worst way, however increasing landtax by as much as 150% per band is not leaving it the same when the dwelling owner is getting far less in rent, if he is lucky enough to have that dwelling occupied at all.

    Sorry Minister, that little sleight of hand does not work. More is not the same no matter how you try to sell it.

    • America’s Cup will pull us out of this mess.

      • Eve says:

        Bermuda will be lucky if there is no loss with AC35 and any positive economic benefit will not be known until late 2017. Two more years of juggling the books will only increase the deficit which will decrease any economic benefit from AC35.

  2. San George says:

    This is the only business where you can see a loss coming and you therefore raise prices to off-set the loss. Government should change its behavior when its revenue is declining. Start by cutting the civil service. Richards would be outraged if the PLP had used this logic to raise more revenue. If land values are declining rents should also be declining. Instead government increases our individual cost. No thought or consideration as to where the money is to come from. Increase cost on businesses mean lower returns on capital. Not a good means for attracting that capital the Richards claims he wants. Arrogance!

    • Lois Frederick says:

      Your land tax and mine will remain the same. No increase.

      • Lois Frederick says:

        Reliable sources tell me that some will go up and some will go down. The tax collected overall will stay the same. No idea whose will go up or whose will go down. The revised ARVs will be released Dec 31st and all will be revealed.

  3. Truth is killin' me... says:

    My ARV never changed Bob. It’s gone up but never went down even during the recession! Will it change on Dec 31st? It better go down because if it doesn’t and my land tax goes up by 2% I’m abstaining from voting for either party! GET THOSE UNPAID PARKING TICKETS SORTED OUT FIRST!!

    • Sickofantz says:

      I think you have a thin grasp of economics. Parking Tickets $420k, Land tax short fall 280K. Maths not your strong point?

  4. hmmm says:

    I don’t think anyone would believe that we would experience a smooth curve under the OBA during their correction after the PLP decimation of our economy.

    I’m grateful the OBA stood up to face the challenge for all Bermudians, whether that be someone who supported the OBA or supported the PLP or supported no one.

  5. Aware says:

    I understand the rationale, however there would be more support for this if some of the Civil Service restructuring as recommended in the Sage Commission were implemented first / as well. Costs saved are the same as revenues received.

  6. JUNK YARD DOG says:

    Now we will see all the commercial and domestic rents go up,along with every thing else, it’s called the cost of doing business, or is it the cost of not understanding business.

    Have you figured out what it cost to run the B.P.S.per week! It’s phenomenal.

    ” There is a hole in the bucked dear Liza, dear Liza!”

  7. Concerned Family Man says:

    The land tax for low ARVs tripled and doubled, (o.6% to 1.8%= 3 times higher; 1.2 % to 2.5% = more than two times higher and 2.4% to 4.4% almost 2 times higher) while high end houses go up only marginal, in the top bracked by less than 10% of the old rate(4.8% to 6.8% = a third higher; 9,6% to 11.6% = about a fifth higher 19.2% to 21.2% = about a tenth higher and 23% to 25% =less than 10% increase). Let’s take a guess in what bracket the ministers’ houses are. Is there opposition, or do the PLP MPs own expensive houses too? Where is the fairness in this? The poor will have to pay for the loss, which usually only affects the high end market. The lowest bracket is $0-$11000 ARV cannot get lower, but the poor people who only have a low end house will have to pay three times (!) as much land tax, they are the ones who can least afford it! It won;t hurt those multi millionaires in Tucker’s town to pay $2000 more, but it will hurt a granny in Somerset to pay $176 instead of $66, or a worker in St. Davids to pay for a $23000 ARV house $1,012 instead of $552. Or does that mean that the ARV can be lowered by a whole bracket? Will that be done automatically or do I have to apply for that? If the ARV is 22800, can I get it under 22000so I won;t have to pay almost 50% more land tax. The government is taxing people out of their houses, and it will increase rents for all who do not own property.

  8. Bermudian Momma says:

    Can someone clarify for me the impact on seniors?

    We currently do not pay land tax on the unit (current ARV 30,000) my 82 yr old mother-in-law resides. Does this mean we will have to pay Land taxes on her unit.

    Also, will we need to pay land tax on my 91 yr old grandmother’s property? Not sure of the current ARV but she does not pay land tax.

  9. Allan says:

    The Finance Minister has released that there will be dramatic increases in the land tax, but he will not advise what our new ARVS will be, or what we can expect. How are we to pre-determine our budget and start getting ready for what increase will have to be put on upcoming leases to cover this? But can we expect that ARVS that are close to the Rent Control level will drop below that, and now will be subject to controls? Therefore tying our hands from any rent increases needed. Looks to me like “we” are afraid to make hard decisions and deal with the major problem: Civil Service over staffed and overpaid!

  10. Coffee says:

    Clearly an excercise by the finance minister to squeeze blood out of Bermuda stone .

  11. Keepin' it Real!...4Real! says:

    Been tellin’ you lot for years…YOU ain’k seen the nothin’ yet boi.
    Actually ya starting to see it…but ya seeing it too late…like a tsunami…If ya see it ,its too late!