Rental tax could cost people their homes’
A proposed tax on rental income could cost people their homes, the finance minister has been warned.
Curtis Dickinson was told that any new tax would hurt people who depended on income from an apartment to pay their mortgages.
Paulette Robinson said: “How dare the PLP want to raise tax on people who struggled so hard to get their own home with an apartment to help them out when they’re not working?”
She said that a rental tax could lead to people losing their homes in the long term.
Ms Robinson was speaking at a pre-Budget meeting held at the New Testament Church of God on Dundonald Street in Hamilton on Wednesday night.
She said after the meeting: “I’m dead against it because when they pass it, it’s going to go up every year or every two years.
“People are going to have a hard time and they are going to increase it and increase it and they are going to end up owning our homes.”
Another member of the public said he “vehemently objected” to the proposed tax.
He added: “It seems as if the PLP solution to the financial challenges is to tax everyone.
“Just to tax, tax, tax, which was never mentioned during the celebrations and festivities that occurred on Court Street after you guys were elected.
“No one talked about raising taxes at this rate. What’s the development of fintech? Where’s the progress on bringing Bermudians back home from the UK? In my opinion, the PLP are not being consistent with their campaign promises.”
Mr Dickinson said no final decisions had been made on a rental tax, which was included in recommendations from the Tax Reform Commission.
Mr Dickinson told the meeting: “I will do the analysis, I will look at the impacts, and then I will make a decision that I feel is the best one for all people involved.”
He explained he had to increase government income but avoid putting extra burdens on those who might be already struggling.
Mr Dickinson said: “We have a national debt of $2.465 billion. The deficit is predicted this year to be approximately $89 million. We have a shrinking population, an ageing population and we have had a number of jobs leave Bermuda.
“But we still have to operate a government. So the problem I need to solve is how do I effectively raise enough funding to run the Government to be able to provide services to the citizenry?”
Some at the meeting backed Mr Dickinson’s attempt to chart a way out the country’s financial problems.
One said: “There will be no quick and easy solution and when we raise the subject of tax ... sometimes tax sounds like a four-letter word.
“I feel really, really fortunate that we have someone like the finance minister that we have.”
Mr Dickinson said: “I am honouring what I intend to have happen in this process.
“I will go out in front of audiences; I will present the ideas in the pre-Budget report; I will listen to concerns; and I will evaluate those concerns as I go about making a decision over the course of the coming weeks.”
The rent tax, as proposed in the TRC report, would slap a five per cent levy on rental income on properties with an annual rental value above $22,000.
The tax would also apply to property owners if they own multiple properties with a combined ARV of more than $90,000, even if the ARV of the individual properties is below the $22,000 threshold.
The TRC expected the tax would generate about $41 million a year.
But Mr Dickinson has signalled that, if the tax is introduced, the thresholds would be higher than those suggested by the TRC.
He told the meeting that the Government is working on a plan to open up home ownership to more Bermudians, but that he could not provide details yet.
Mr Dickinson added that the Government is still considering increasing the retirement age as part of a bid to reform the pensions system.
However, he said: “That work is ongoing and there is no definitive position yet as to when we would do that or if we would do it.”
Age Concern said it would meet Mr Dickinson next week to discuss the rent tax proposal.
Claudette Fleming, executive director of the charity, said: “The Board of Directors of Age Concern Bermuda would like to acknowledge the concerns raised by our membership and the general public on the proposed rental tax and its implication on senior homeowners and seniors who rent in the local housing market.
Dr Fleming said Age Concern members could register their views on the tax proposal at firstname.lastname@example.org.