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1,000 seniors will have to pay as land tax exemption is rolled back

Approved legislation to roll back land tax exemptions for some seniors will result in around 1,000 paying some land tax, according to the Premier.

Paula Cox said the move would increase revenue by $4 million dollars, while still providing tax exemptions for most seniors, but Opposition members said it was another example of broken promises from the Government.

The Land Tax Amendment Act 2012 is intended to limit the number of seniors eligible for land tax exemption. Under the legislation, seniors who live in a home with an annual rental value (ARV) of $50,000 or less will not have to pay land tax on that property.

If they live in a property valued higher than that, they would have to pay land tax, but would receive a concession equal to the value of land tax which would be charged to a home with an ARV of $50,000.

The absolute exemption for seniors was put in place in 2005. Before then, the legislation was similar to the current system, but with a limit of $40,000 rather than $50,000.

Ms Cox said that around 3,300 seniors will still be exempted from paying land tax on their properly, but around 1,000 would now have to pay some land tax.

While the Opposition said they approve the legislation, they criticised the Government for widening the exemptions in the first place, calling it a campaign promise.

Shadow Finance Minister

Bob Richards said the policy change was a flip-flop and demonstrated a lack of forward thinking.

“It’s hard to see a string of strategic thinking here,” he said. “We are looking for consistency. People don’t like an unpleasant surprise. Even pleasant surprises can be unsettling.”

And One Bermuda Alliance seniors’ advocate

Louise Jackson said: “It was an election promise, and now it’s a broken promise, and it does affect some people badly. Government is financing its debt on the backs of seniors.

“Can’t you find someone else to pick on? How can you sit there with a straight face and claw back this money from them? We wouldn’t have done this in the first place.”

Health Minister

Zane DeSilva responded that previous governments had gone back and changed their minds on policy, saying that former Premier David Saul had increased duty on boats and dropped rates again around 18 months later.

“Maybe we have learned a few things along the way during our time in opposition,” he said.

“This Government looks at where we are today, we look at how we have to get to tomorrow, we don’t lose track of where we were yesterday.”

He said he has spoken to seniors who understand and support the difficult decision to roll back these exemptions, but added: “As long as we have the people at heart we will be all right.”

The OBA’s

Patricia Gordon-Pamplin meanwhile said that it is important for the Government not to make election promises when they cannot keep them.

“While they are rolling it back, they didn’t before because it was more important to gain favour irrespective of the public purse,” she said. “The reason it has to be clawed back is there is no more money in the kitty.”

The House also debated and approved the removal of stamp duties on transfers or assignments of mortgages.

Introducing the Stamp Duties Amendment Bill 2012, Ms Cox said the intent of the amendment was to encourage competitive rates in the banks by making it easier to switch mortgages from one back to another.

Opposition MPs expressed support for the intent of the bill, but questioned if it would be effective.

Shadow Estates Minister

Cole Simons said that the stamp duty rate, which is set at one tenth of one percent, would pale in comparison to the other fees involved in moving a mortgage between institutions.

Ms Cox discussed possibly rewording the legislation, but in the end decided to continue with the amendments as written.

Photo by Glenn Tucker Around 1,000 seniors face paying some land tax as a result of a rollback of an exemption previously in place.

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Published March 12, 2012 at 9:55 am (Updated March 12, 2012 at 9:55 am)

1,000 seniors will have to pay as land tax exemption is rolled back

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