Developers in Cayman are getting an early Christmas present.
Government announced on Dec. 1 that it is extending its reduced duty rate on imported building materials for another year. Anyone bringing in building materials will continue to pay a flat 15 percent rate, rather than the normal 22 percent.
Finance Minister Roy McTaggart said the concession was stimulating economic growth and would be continued at least until Dec. 28. 2018.
The Cayman Compass reported last month that Grand Cayman was in the midst of an unprecedented development boom with more high-value planning applications approved in 2017 than ever before.
Mr. McTaggart said, “The construction industry continues to spur economic activity – the value of imported building materials has increased on average by 9.7 percent per year between 2011 and 2016 and was six percent higher in the first six months of 2017 when compared to the same period in 2016.”
Paul Pearson, one of the owners of Davenport Development and a former Chamber of Commerce president, said the reduced duty rate had helped ensure higher quality development in the Cayman Islands over the past few years.
Combined with a general upswing in the economy, he said, the rate cut was helping spur new construction work and keeping people employed in the industry.
“It impacts our bottom line and it also impacts the price we can sell units at. Everything we get, whether it is through A. L. Thompson’s or Cox Lumber, there is duty paid on it. They couldn’t give us the prices they do without that duty rate.”
He said the rates impacted the range and quality of everything from floor tiles to plumbing fixtures in new developments. Davenport is currently part way through construction on Vela, its latest condo development on South Sound, which is being built in three phases.
For the purpose of the concession, building materials are defined as all components and substances used in the “construction, renovation or restoration and forming a permanent part of any building or related structure.”
Items such as furniture, accessories, electronics and appliances are specifically excluded from the 15 percent concessionary duty rate.
Government also extended the 100 percent duty waiver on building materials for the Sister Islands, a 100 percent stamp duty waiver for land purchases on the Brac and a concessionary rate of 12.5 cents per gallon on the importation of motor gasoline to Cayman Brac until Dec. 31, 2020.