Letter to the Editor: Real estate tax for expats

I’m
a Caymanian and in no way would I ever support tax on real estate.

Freehold
is an inherent right that all Caymanian land/property owners should have on all
properties they purchase, whether for immediate or long term development.
Having said that, I do not feel that this is a right that foreign investors
should benefit from, and I will explain why and how it affects us all.

For
example, if Mr. Joe Blow, on one of his many visits to Cayman on his private
jet, decides he wants to purchase a piece of prime real estate for CI$800,000
but has no intensions of developing this property, in fact he plans to sell it
in about 10 years time to make a profit during this time the country goes
through a construction boom and infrastructure upgrades, i.e. better/new roads,
more street lights, tourism growth etc. all this will have a positive impact,
price wise, on Mr. Joe Blow’s property at absolutely no cost to him.

Now
10 years or so has passed and the property is sold for CI$1.2 million, Mr. Joe
Blow makes a return of over CI$300,000 on his investment, sure the Government
would have made money on the one-off stamp duty fee, but who is the real winner
here?

Now
look at it with a tax in place for non Caymanian owners; Government would be
collecting fees annually on all these properties and all the Joe Blows would
still be making profits on their investments, but also contributing to rising
infrastructure costs.

But
don’t stop there!

What
if we no longer offered duty concessions to rich developers who build the
multimillion dollar condos, hotels etc. and all we get in return are the stamp
duties on the sales of the units (which are sold for top dollar, despite the
reduced cost of materials due to the duty concessions).

What
I would propose is that the Government can offer to defer payment of duties on
construction materials until the sale of the units or lease agreements are
signed, at which time not only the stamp duty is due, but the duties that were
deferred at the start of the project are also due and with interest.

Now
we are benefitting from the development of Cayman and we no longer need to pass
on the rising infrastructure cost to the hard working Caymanians.

Who
knows, if this was put in place 10 to 15 years ago, we might not be in this
mess today.

Now
if we could only control the Government’s wasteful spending habits!

Marcos
Thompson

0
0

NO COMMENTS