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How To Pay Unpaid Property Tax in Jamaica

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As people from the Caribbean immigrate to foreign countries like Canada, USA and UK, we left behind properties that would been immediately repossessed by the government due to unpaid taxes.  Although Jamaica have a system in place to do just that, it is a bit more lenient and repossession could take longer than you would expected.

In 1995, my siblings and I immigrated to the United States from Jamaica, we left a house and family farm land that’s been in our family since the late 18th century.  Because we were teenagers at the time, we did not realize the importance of maintaining the property, much less paying the taxes.  My grandfather was the martiach of the family and paid all the taxes, but when he died in 1999, all payment ceased.   Since we were not in Jamaica and haven’t visited for a while, we were unaware of the mandatory payment so  the tax remained unpaid for 10 years until my Aunt recieved a letter from the Tax Administration office in 2009 about both properties in Westmoreland and St. James.

In Jamaica Property Tax is a tax levied on property owners to provide revenue for the provision of public & community amenities provided by the local government.  If you are the owner, occupier, mortgagee in possession or other person in actual possession of a property in Jamaica is liable to pay property tax.

According to the Tax Administration the property tax regime has been reformed to expand the number of value bands to eight (8), with reduced tax rates ranging from a flat rate of $1,000 on properties valued at $400,000 or less, up to high of 1.3% on properties valued over $30,000,000. The rates are now applied on a graduating scale allowing property owners to benefit from the rate application to each preceding value band.

Valuation in Jamaica is based on the unimproved value of the land, that is, the price which the owner would expect to receive if he/she were selling the land alone disregarding the value of any improvements such as buildings and crops.  Several factors determine the (unimproved) value of land, including: Size of the parcel of land, Zoning and type of land, Potential for development, Topography (elevation & other surface features), Soil classification, Access to municipal & commercial services, and neighbourhood characteristics.

Since we owed over 10 years of back taxes, we were curious as to what the government could do to recover the unpaid tax.   Under the Tax Collection Act the government may take the following actions to collect back taxes:

  • Issue summonses for arrears and penalties owed, if persons fail to attend Court, a Warrant of Disobedience may result, where they may be imprisoned for up to three (3) months or an Ex Parte order can be made.
  • Levy Warrant or Distrain on Goods/Chattel seizure of goods and auction of same to recover outstanding property tax
  • Levy Warrant Distrain on Securities, etc. seizure money, bonds, securities, etc. and disposal to recover outstanding Property Tax.
  • Caveat on the Property (lien):- This blocks the person from transacting any business with the property, such as sale or collateral.
  • Forfeiture of Property:- The property may be seized and sold to recover property tax owed.
  • Collect from People in Possession-payments may be demanded from persons in possession of or occupying the property. E.g. owner, occupier, renter, mortgagee, leasee or other person in actual possession of the property.

The biggest questions we had when considering paying the back tax was the amount and what is the purpose of the tax.  Like most countries the Property tax is intended to finance property-related services in communities throughout Jamaica.  Property Tax pays for:

  • Maintenance and expansion of street lighting,
  • Collection and disposal of solid waste,
  • Community infrastructure and civil improvements,
  • Administration of Local Authorities,
  • Repairs to fire stations, and Rehabilitation of parochial/farm roads.

 

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