Huge increases in Bermuda's annual rental values (ARVs) will not translate into increases in land tax this year or next, Finance Minister the Hon. David Saul pledged yesterday.

"People are totally alarmed because they think this will have a bearing on land tax. That is not true for this July or December. There will be no increases in land tax as result of increased ARVs this year,'' said Dr. Saul.

A draft list of ARVs was published on April 1. The annual estimates of rental values are used to calculate land tax, which is a percentage of the ARV.

"Next year, when the Ministry of Finance is doing new valuations, we will rewrite the land tax percentage rates downward to bring the land tax that people will be paying next year into line with what they are paying now,'' Dr.

Saul said. "Next year we will use these new rates and any increase in land tax will be kept to a minimum.'' "There will be no major increases in rates next year. For some people their land tax may even go down.'' The current annual residential ARV bands and corresponding land tax percentages are; ARV up to $7,200 -- 1.64 percent; ARV from $7,201-$14,400 -- 4.94 percent; ARV from $14,401-$21,600 -- 9.92 percent; ARV from $21,601-$28,800 -- 16.8 percent: and ARV over $28,800 -- 25.31 percent.

Commercial land tax is a flat rate of six percent of ARV yearly.

Although, land valuations come under the auspices of the Ministry of the Environment, but the Ministry of Finance sets the bands and the percentages.

And the new ARVs will not mean more Bermuda properties will be available to non-Bermudians, according to Mr. Martin Brewer, assistant chief Immigration officer with the Ministry of Labour and Home Affairs.

"Policy has been to adjust upward to keep the number of houses that there were at the start of the previous valuation period,'' he explained.

The current ARV rate for a possible non-Bermudian buyer is $43,800.

Dr. Saul confirmed that the same number of properties will be caught with a new adjustment.

Bermudians who qualify for pension relief from land tax will not notice a difference either, according to Dr. Saul.

However, people paying land taxes will not be able to cash in on a five percent discount for paying early this year. The discount was withdrawn in the Budget in February.

The land valuation office normally reviews ARVs every five years. This year, the review was extended by one year to six years.

In the most recent draft, valuations have increased considerably with some areas realising ARV jumps of over 100 percent.

One of the biggest increases was on Harbour Road where the ARV of a house rated at $81,000 skyrocketed to $193,000, according to the draft changes recently placed in post offices around the Island.

The Hon. David Saul