Consider Taxing Multiple Units Over $90K ARV
Individuals or companies who own multiple rental units in aggregate at or above the $90,000 ARV “should be taxed at the 5% rate,” Citizens Uprooting Racism in Bermuda [CURB] said, as this would “bring about a greater wealth redistribution and have those who are in a wealthier position pay a fairer share of the tax burden.”
Minister Confirms Proposed Residential Rental Tax Will Not Be In Budget
The Government’s Pre-Budget report said that “in order to broaden the tax base” they are considering taxing rents in line with the recommendation in Tax Reform Committee report, which suggested a flat tax of 5% on all commercial rental units and individual rental units with an annual rental value [ARV] over $22,000.
However a number of people expressed concern about the proposed tax, and on February 8th, Finance Minister Curtis Dickinson said they “carefully evaluated” the items proposed in the pre-budget report, and said they “will be able to meet our budget objectives without having to introduce a residential rental tax.”
CURB: Consider Taxing Those Who Own Multiple Units In Aggregate At Or Above $90K ARV
The organisation said that Minister Dickinson’s announcement that he is dropping the rental tax on “individual rental units with an ARV over $22,000 is welcomed by CURB because of the issues for Bermudians we outline below.”
“However CURB believes that for those individuals, companies or trusts who own multiple rental units in aggregate at or above the $90,000 ARV, with the resultant income available for investment, should be taxed at the 5% rate as a way to bring about a greater wealth redistribution and have those who are in a wealthier position pay a fairer share of the tax burden,” a spokesperson said.
The CURB spokesperson continued on to say, “As originally proposed by the Tax Reform Committee, CURB believes the impact of this 5% tax on middle class Bermudians, already struggling economically, is likely to be extremely negative.
“There are three communities on the island likely to be most impacted, a] seniors, b] first time home owners, and c] Black Bermudians.
“Age Concern has already expressed their concern publicly about the possible impact on seniors who are homeowners or who rent. CURB notes historically the difficulty that many of our seniors faced when trying to purchase property in the past, i.e. access to mortgages/loans due to racialized loan policies.
“The only way they could hope to build some sort of equity was through the purchase of land and building their homes, often helped by family and friends working weekends to build the home over years as money was saved.
“Additionally, many of those seniors were unable to pay into their social insurance as historically it was only accessible by those who had full-time employment, leaving many who worked as domestics or construction workers without the ability or finances to pay regularly into the government’s social insurance plan, leaving them today with the minimum social insurance payout. So for those who were somehow able to build a small home or inherited one, rental income is the only way they survive in retirement today.
“For the young and/or first time home owners, access to the housing market is often blocked by the cost of building, purchasing and the need for such a large deposit, a rental unit being sometimes the only way they can even contemplate purchasing. Adding additional tax only puts undue financial stress on young Bermudians hoping to build a future in the country of their birth.
“For many Black Bermudians historically, the only way to gain access to wealth equity was to ensure a rental unit was built in or on their property to help with the costs.
“For many the rental income is the only way they can survive in Bermuda’s astronomically expensive society. Census statistics clearly show that for Black Bermudians access to income, employment, property and wealth building continues to be an ongoing struggle.
“CURB believes that many Bermudians would agree that rental tax should apply to property owners if they own multiple properties with a combined ARV of more than $90,000, even if the ARV of some of the individual properties is below the $22,000 threshold.
“CURB recommends that consideration be given to introducing a 5% tax on commercial rents and individuals, companies or trusts who own multiple individual rental units [2 or more] in aggregate at or above the $90,000 ARV.
“That if Government at some time in the future is considering a rental tax on ARV less than $90,000, then consideration must be given to the social factors above,” CURB concluded.
So CURB is in politics now.Go lay down and mi d your business.
How about we TAX the PLP and all of those that participated in their last 14 years of reckless spending. Why should anyone other that the culprits be responsible.
If I overspend on my VISA and MC is my neighbour responsible?
Overspend? That is a polite way of putting it.
Curb is mad
What does this have to do with CURB?
Oh, wait, only rich white people own multiple houses …
Never mind; carry on.
If the tax is introduced it should be for everybody, That way the people that voted for higher taxes, who presumably want higher taxes, all get to participate fully in the taxes they voted for.
Errrmmmmm, all this and not one word on how much this is estimated to earn in tax revenue?? The wealthiest are already paying more in higher land taxes and higher payroll tax. I’d also bet these are the people who didn’t vote Pee El Pee!! Why not make Pee El Pee supporters take up the slack?!?! Hahaha!!
I sure wish CURB had a true understanding of how the ARV system works as this proposal will/can hurt all levels of home owners. The ARV can/will increase if and when any renovations are done to a home that have Planning Permission granted. Homes that have not had any reno’s In years will stay at the initial ARV and a new home will get a huge new ARV level.
A more simple solution would be to have all home owners declare via their land Tax return if the home is their primary home and apt. If the home is not their primary home then a higher tax rate should apply as it will be deemed to be an investment home. This will also not increase the size of the Govt ad no additional staff would be needed.
great idea was this idea not in the pre budget. no idea why they chose to focus on lower rents bracket to tax. someone was not awake at the wheel!!!!
Anything under rent control should not be taxed.
I would still expect most landlords to simply pass on all or part of the tax to the tenants. Has anyone bothered to find out exactly which properties would be affected and who the tenants are?
Why not? They voted for higher taxes.
If you are going to tax rental income then there should be no restriction on the ability of the owner to adjust rent.
The underlying assumption seems to be that the majority of owners of multi-unit rentals in aggregate at or above $90k ARV in Bermuda are white. I suspect the reality may differ from the myth, but by all means you keep promoting your special brand of politically permissible race talk CURB. I’m sure you think you mean well.
Seems that the PLP are now ignoring CURB
why you so dopy curb?
Has Curb properly considered the economic impact of such tax? Five percent to the Goverment means five percent less to the private sector I.e painters, contractors and landscapers. I doubt any of the members of Curb understand any of those industries but nevertheless they should be considered rather than testing the water for the ruling Goverment.
I hear you in theory, but in reality no landlord is going to start cutting his own lawn or painting his own walls over an additional 5% tax. They may pass it on to the renter, but I don’t think there is going to be a direct 5% hit to private sector spending.
I wonder if some lawsuits do get a second and third exhaustive review to see if the government should go ahead with them, they are very, very costly to the public purse. Funds needed for other programs.
Someone made a phone call to CURB!
Bermuda cannot tax its way out of the deficit or the debt – the government must cut costs starting with the civil service.
I concur, that seeking the truth is vital to a clear and positive way forward , and malicious activity if and when proven need to be addressed , and this may take some time. However , between now and then the costs of our every day living needs to be handled.
So now CURB thinks it is a group that should be listened to on financial matters that they do not contribute to do they?
It is not like many people listen to CURB on any matters in the first place.
Well that statement certainly seems to be confirmation that CURB has nothing to do with addressing the historic effects of racism but rather is another arm of the PLP Government propaganda machine!
Pure political propaganda is how I would describe that statement.
CURB is a far cry from the Truth and Reconciliation Commission South Africa had!
Where did you get 5%?
Five isn’t even realistic.
Legalise marijuanna tax that.
Tax stupidity…tax committies…tax tax…
Bullwinkle : Yes, tax stupidity. Should make a fortune !
Churches should be taxed like any other for-profit business. It’s their members that wanted higher taxes. Give them what they voted for.
Agree.
It makes more sense, morally and ethically, for churches to be taxed as their members can vote. On the other hand expats and IB should be exempt as they have no vote.
er what? what on earth has this got to do with curb?