Property stamp duties help contain budget deficit

Source: Lands and Survey Department. Stamp duty based on the amount assessed, not collected.

When Finance Minister Roy McTaggart announced a smaller-than-expected government budget deficit last week, he credited cost savings and higher revenues for the result.

McTaggart said based on preliminary data, core government was forecast to close 2020 with a $50 million deficit that would rise to $75 million for the public sector as a whole, once government’s statutory authorities are taken into account.

This is significantly less than the $168 million deficit that was predicted only six months earlier.

Stamp duty collections were the largest positive outlier on the revenue side, with duty on property transfers exceeding the initial 2020 projections by $20.6 million, McTaggart said.

Statistics from Lands and Survey show that the department assessed a total of $60.5 million in property stamp duties. This is lower than the $71 million and $75.7 million of revenue, respectively, in 2018 and 2019 but the third-highest amount on record.

The pandemic-related lockdown measures impacted government revenues from property transfers only in the second quarter of last year. After the value of stamp duties dropped to $9.2 million between April and June, revenues recovered to $16.5 million and $18.6 million, respectively, in the third and fourth quarter of last year.

The volume and value of property transfers reflect this trend.

Despite a 30.3% year-on-year drop in the first six months, last year saw a total of 1,948 freehold and leasehold transfers, a figure that was only exceeded in 2018 and 2019.

The value of property transfers of $783.9 million was the lowest of the past five years but still significantly exceeded any other year of the past decade.

Source: Lands and Survey Department. Freehold and lease transfers.

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