Citizens who do not meet the May 22 deadline to file their Valuation Return Forms could end up paying a penalty. That is because under the Valuation of Land Act 18 of 1969, owners of property who fail to file a return describing the property are liable on summary conviction to a fine of $500.
As of now there is no word on whether the Finance Minister Colm Imbert will extend the deadline date for submission of forms.
While property owners are required to do their own assessment of the value, the Valuation of Land Act empowers the commissioner of valuations to value properties based on an annual rental value. The information is then sent to the Board of Inland Revenue (BIR).
The BIR will issue a notice of assessment of the tax to be paid, where the payment should be made and the penalties which will incur if the tax is not paid.
Owners who are not satisfied with the valuation of their property have a right to object under the law. The act states that an owner or local authority who is dissatisfied with a valuation may, within 30 days after service of the notice of valuation, post to or lodge with the commissioner an objection in writing against the valuation.
Objections can be filed on the following grounds:
• Values assessed are too high or too low;
• Lands which should be included in one valuation have been valued separately;
• Lands which should be valued separately have been included in one valuation; or
• Person named in the notice is not the owner of the land.
Asked whether all the documents listed on the form must be submitted, an officer of the Valuation Division explained that it is necessary to submit a copy of the deed of the property or any legal document which shows you are the owner of the property, land and building tax receipts (2009) and T&TEC and WASA bills not older than three months and any other supporting documents, including a lease or rental agreement.
KPMG tax director Gillian Wolfe explained that HDC homeowners are not exempt from payment of property tax. She said: “They are the owners of property and will be called upon to pay it also.” Those who have a deed for their HDC property are required to pay the tax.
But HDC communications manager, Maurisa Findlay, said: “Given the current regime for valuations and the required property tax payments, the HDC is prepared to seek the assistance of the Ministry of Finance to arrive at a policy position to treat with the quantum of funds the organisation will be required to pay in property tax for homeowners in its licence-to-occupy, rent-to-own and rental client portfolio.”
Findlay said the HDC “will communicate with these residents prior to the May 22 deadline on the way forward.”
She said the managing director Brent Lyons has held discussions with divisional heads and the Permanent Secretary of the Ministry of Housing to articulate the organisation’s request/position.
Squatters, Wolfe said, will also have to pay the tax.
“The law does not exclude squatters. The law talks about the occupier of property being held liable for the tax,” she said.
Deferrals
While pensioners are not exempt from paying property tax under the law, the act makes provision for deferrals by the Board of Inland revenue.
Section 23 (1) of the act states: “The board may upon the application of the owner of land authorise the deferral of the payment of the assessed tax on the land on the grounds of the impoverished condition of the owner and his inability to improve his financial position significantly by reason of age, impaired health or other special circumstances, that undue hardship to that owner would otherwise ensue.
To qualify for deferral an application must be made in writing on a form prescribed by the BIR, with supporting evidence that the applicant in receipt of a public assistance grant; a disability grant; a senior citizen’s grant; or a T&T conditional cash transfer card from the State.
Wolfe said in instances of deferral “the taxes are deferred until you can do better. If it never gets better, you will never be held liable but whoever inherits the property will be called upon to pay the taxes.”
State can seize land
The law specifies that citizens have until September 15 to pay the tax failing which they will be penalised.
Section 34 (3) states that where “any amount of tax is not paid on or before September 15 a further sum of 10 per cent on the amount of tax shall be added thereto by way of an increased tax; and interest at the rate of 15 per cent per annum on the amount of tax is to be applied to the tax as increased from September 16 to the date of payment, unless the board is satisfied that the failure to pay the taxes did not result from the default of the taxpayer.”
Where arrears of annual tax payable on land are outstanding for six months, a notice of demand will be sent to the owner of the land by registered post.
If after 12 months the payment is not made, the act makes provision under section 41 for the levy “upon the goods, chattels, and effects of the owner; or upon the goods, chattels and effects, being upon the lands so charged with such tax of the tenant or occupier of the lands or any part thereof charged with such tax.”
The act states that anyone authorised in writing by the board, to execute any warrant of distress, has the authority to “break open any building in the daytime for the purpose of levying such distress.”
If the tax and arrears are unpaid for five years, the owner is at risk of losing the property.
Under the act, the BIR must publish a notice in the Gazette and one newspaper in daily circulation and post in its offices and sub-offices for one month, notifying the owner of the land that unless the outstanding arrears are paid “before the expiration of the specified period, together with all sums which at the time of payment may be due in respect of any tax, the said lands will be liable to forfeiture to the State.”
Section 41 (1) of the act states that the President may, by warrant “order that such lands be forfeited to the State, and immediately upon the registration of such warrant as hereinafter provided, such land shall be forfeited, and shall vest in the State, in absolute dominion, free and discharged from all rights, estates, interests, equities and claims of any other person.”
In order to obtain possession of any lands forfeited under section 41, the Commissioner of State land is authorised under the act to issue a warrant to the board, marshal, police officer, or other person authorising him to take possession on behalf of the State and to evict all other persons occupying the land.
The act at section 49 makes it an offence for anyone to try to prevent any authorised state agent from taking possession of the land. That person would be deemed to have committed “an offence and shall be liable on summary conviction to a fine of $5,000.”
Under section 45 (1) of the act any land that has been unoccupied and un-assessed for a period of 16 years and for which “no taxes have been paid, shall be liable to be forfeited to the State.”
Exemptions
The Property Tax Act section 16 (1) states that “all land in T&T is liable to taxation under this act.”
Exemptions listed under that section of the act include:
• lands used exclusively as churches, chapel and places of public worship of any religious denomination and every cemetery or burial ground that is enclosed and actually required, used and occupied for the interment of the dead, but not land that is rented or leased by a church or religious organisation to a person other than another church or religious organisation;
• school buildings, offices and playgrounds of schools within the meaning of the Education Act.
• property used for a place of learning maintained for educational, philanthropic or religious purposes,
• land owned, occupied and used exclusively by an incorporated charitable institution;
• land belong to the State, a statutory authority or state enterprise controlled by the State
• land used for public hospitals, asylums and institutions for the relief of the poor;
• land belonging to UWI, UTT, COSTAATT or University of Southern Caribbean;
• land owned or occupied by a foreign government or international organisation of which T&T is a member
All Land (including vacant land) in Trinidad and Tobago shall be rated on a Rental Value basis.
Annual Rental Value (ARV) is the rent at which a property will let from year to year.
Annual Taxable Value (ATV) is the rent at which a property will let from year to year after a deduction of 10 per cent for voids.
Annual rental value – vacant land
The annual rental value of vacant land will be found by taking a percentage of the current market value of the land.
Rate of tax (Categories)
Agricultural 1 %
Residential 3%
Commercial 5%
Industrial with building 6%
Industrial without building 3%
Factor used to value residential property
• Location of the property (neighbourhood)
• Classification of the property (executive, modern, standard (I & II)
• Category of the property (agricultural, commercial, residential, industrial)
• Dimensions: property floor area
• Modifications to the particular property
Valuers take several factors into account in calculating the unit value of the property which is used to calculate your property’s rental value.
The classification of the property (executive, modern, standard I and standard II) depends on the features of the building – leisure facilities, number of bedrooms, bathrooms, types of utilities available, special rooms such as game room.
Property classifications:
Standard home I: one Bathroom
Standard home II: two Bathrooms
Modern home: At least one ensuite bathroom with a specialty room
Executive home: May have at least as many bathrooms as there are bedrooms and specialised areas eg a separate room for dining, office, library etc.
The classification depends on factors such as quality of construction and condition.