Seniors decry land tax increase
Massive increases of up to $880 in six-month land tax bills have left seniors worried over how they will make ends meet.
Seniors were shocked when they got their invoices which were much higher than six months ago. One homeowner told The Royal Gazette: “We opened up our land tax bill and noticed that it had gone up significantly.
“When I looked back at the last bill I saw it had gone up $887.50.
“We are over 65, way over, we do get $900 exemption but the increase has basically wiped out the exemption.”
She added: “The Government needs to rethink this latest insult to the people of Bermuda.”
The woman explained that she and her husband, of Devonshire, had earlier owned retail businesses in Hamilton and had always hired Bermudians.
She said: “We have saved for our retirement and live on a very fixed income, just getting by, in this very expensive country.”
The 76-year-old added: “We’ve done everything right, and now this. I have not taken anything from Government, ever.”
Curtis Dickinson, the Minister of Finance, announced an annual $300 base charge on all homes in the 2019-20 Budget in February. The changes to land taxes, which are determined by annual rental values, also included zero rates on properties with ARVs up to $22,000.
Fees on homes with ARVs between $44,001 and $90,000 jumped from 12 per cent to 17 per cent, and those in the next bracket, up to $120,000, increased from 25 per cent to 30 per cent when the new rates came into effect at the start of last month.
Mr Dickinson said seniors would continue to get an exemption on properties with an ARV of $45,500 or less.
The woman explained that the couple had earlier paid $2,130 in land tax on their home, which has an ARV of $81,000, and the most recent bill was for $3,017.50.
She said: “We could barely pay the $2,000 and now we’re being asked to pay $3,000, how can someone on a fixed income afford that?”
Her husband added: “The biggest problem with Bermuda right now is there’s not enough people to pay taxes and keep the country running, everybody’s got to pay more.
“We don’t have a problem with that, but I think they have to treat the seniors a little better.”
Another woman said she was alarmed by the $150 surcharge on each of the four rental properties connected to her home.
The 68-year-old, from Hamilton Parish, said she benefited from land tax relief on the apartment she lives in through the seniors’ exemption.
But she said she covered the land taxes on her rented properties, only two of which are occupied, and that she tried to keep rents low in fairness to the tenants.
The homeowner said: “As a black person, when you retire, real estate is the thing to have because you’ve got an income, you can’t live off the government pension, you save your money and you buy property.
“All my apartments rent for less than $2,000 because I try not to overcharge people but I still have to pay house insurance, land tax and things ... me and my husband won’t have enough money to live off.
“I know they say you can pass the land tax off to the tenants so now I’m wondering if I should go to rent control, get all my rents raised and pass all this money off to the tenants, which is unfair to them as well.”
Age Concern Bermuda said that an explanation was needed for the $150 surcharge included in the latest bills and that better communication from the Government would have helped homeowners to plan their finances.
Claudette Fleming, the organisation’s executive director, said a member alerted the organisation yesterday to the surcharge” which had “no definition or description” but appeared to be attached to the senior’s rental unit. She added she had contacted the finance ministry to ask for more information on the reason for the extra charge, but had yet to get a reply.
Dr Fleming said: “The senior in question, also called the land tax department and they were unable to explain the nature of the surcharge.”
A government spokeswoman confirmed that the $150 was the half-yearly instalment of the $300 base charge introduced by Mr Dickinson in his Budget earlier this year.
Dr Fleming added: “The devil is always in the details. There should be a description of the charge on the demand notice and a related communications plan to ensure that seniors in particular understand how the tax will be practically administered.
“In addition, language should be clear and consistent, for example ‘base charge’ is identified in the minister’s statement but the language ‘surcharge’ is used on the demand notice or invoice.
“Most of us won’t have connected the two, that is if we even recalled what the minister said way back in February.
Mr Dickinson said in February that land tax was expected to raise $85.4 million in this financial year.
Tax rates on homes with an ARV of between $22,001 and $44,000 remained unchanged and owners of properties with ARVs of more than $120,000 saw the rates rise from 47 to 50 per cent.
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