Tax break for spouses hailed as ‘compassionate governance’
A policy announced today allows the Tax Commissioner to grant relief from land tax to surviving spouses for up to 24 months during the probate process after the death of a loved one.
Wayne Furbert, the Acting Minister of Finance, told the House of Assembly that the move ensures that “no spouse is penalised because the estate remains tied up in legal procedures”.
The approach comes after a backlog in the processing of probates — the judicial procedure for enacting a deceased person’s will and allowing for their estate to be settled.
Mr Furbert said that while seniors in Bermuda were granted exemption from land tax after reaching the age of 65, the provision fell away after their death, leaving the surviving spouse — often of “similar age, limited income or frail health” — facing an unexpected and “sometimes overwhelming” land tax bill.
He said that “at a time when a spouse is dealing with grief, funeral arrangements, legal obligations and the emotional weight of loss, the last thing they should face is the fear of not being able to stay in their own home — and yet, for many families, probate can take months, even years, before the estate is legally transferred”.
The issue, reported by The Royal Gazettesince 2023, prompted calls from legal sources for extra resources to be allocated to the Supreme Court registry.
The Government moved last year to issue short-form death certificates to improve the processing of estates. Additional hires were made this year in the judicial department.
Mr Furbert said that a spouse waiting on the processing of probate would have no access to the estate’s assets while “suddenly responsible for the full land tax burden”.
He told MPs that the situation was “not aligned with Bermuda’s values” or “reflective of fairness or compassion”.
However, Mr Furbert said the Land Tax (Relief) Act 1968 and the Land Valuation and Tax Act gave “broad authority” to the Tax Commissioner to grant relief in cases of hardship.
Under a new administrative policy, a surviving spouse who resides in the property as their primary residence is eligible for land tax relief for up to 24 months while probate is being completed.
Mr Furbert said the move would avert “unnecessary financial distress or the risk of displacement”.
He said it was a predicament now affecting spouses and advised anyone eligible under the policy to contact the Office of the Tax Commissioner.
The acting minister added: “Through this new policy, enacted under existing statutory authority, we close a gap in the system that has long caused unnecessary hardship for surviving spouses.”
Questioned by Douglas De Couto, the Shadow Minister of Finance, Mr Furbert confirmed that spouses would need to be 65 or older.
In response to Opposition MP Dwayne Robinson, he said spouses would simply need to appear before the Tax Commissioner with documents attesting to the probate in order to qualify.
Vance Campbell, of the One Bermuda Alliance, also asked if other senior family members might qualify, but Mr Furbert said: “We will have discussions on that, but we wanted to start first with spouses.
“As time goes on, we can take a look and see if it’s within the boundaries.”
Mr Furbert told the House that spouses would be able to ask for an extension beyond 24 months if required.
Opposition MP Robin Tucker queried the acting minister on any “discussions” for speeding up the probate process.
Mr Furbert said that while the matter did not fall under the remit of the Ministry of Finance, it was being dealt with by the Attorney-General’s chambers.
• To read the minister’s statement in full, see Related Media
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