Almost 900 Caymanian families were able to get their foot on the first rung of the housing ladder through government’s stamp-duty waiver for first-time home buyers.
The policy cost around $15.35 million in lost revenue over the past three years and eight months. That’s out of a total of $27.25 million worth of duty concessions over the time period.
Between 2021 and August 2024, the government granted a total of 891 applications for concessions to Caymanian property buyers in Grand Cayman. The policy allows qualifying Caymanian home buyers to avoid the 7.5% tax payment – which makes buying a first home prohibitively expensive.
As of this year, Caymanians buying their second home have also been able to take advantage of a 3.75% stamp duty, provided the value of their property is below the $600,000 threshold.
This is according to figures released to the Cayman Compass through a recent freedom of information request.
From January to August this year, government recorded $4.6 million in foregone revenue through the stamp-duty waivers, the highest figure based on the information that was released.
The total amounts from 2021 to August this year accrued under three separate finance ministers – Chris Saunders (April 2021-March 2023) and Wayne Panton (March 2023-November 2023), both under the PACT administration; and Premier Juliana O’Connor-Connolly (Nov 2023 – present) under the current UPM administration.
‘No blanket policy’
Granting of concessions is not a new issue and has previously ignited debate, especially with the challenges of population growth and the demand for housing both issues of concern for the community. While stamp-duty waivers for large expensive developments have ignited some controversy there is relatively broad support for the rebates for Caymanian buyers.
The Ministry of Finance, in its response to the Compass request for formal guidelines on concessions, stated that there is “no blanket policy for granting waivers or refunds”.
“Applications for the waiver or refund of stamp duty, import duty, or planning fees are considered by the Minister for Finance and Economic Development and/or the Cabinet on a case by case basis,” it said.
These applications, it explained, are processed by the ministry’s corporate unit, “but the decisions regarding the grant or refusal of any waiver or refund are made by the Minister of Finance and Economic Development or the Cabinet”.
Since 2015, the Office of the Auditor General had been recommending that government develop “a formal, comprehensive concessions policy”, but so far, none has been developed.
There have been attempts to create a concession policy in the past, but those only made it to draft stages and there has been no further movement on any document to structure the process.
By the numbers
According to the data, in addition to the 891 stamp-duty concessions granted to first-time homeowners, a total of 242 applications for Cayman Brac stamp-duty concessions were granted between 2021 and August 2024 amounting to about $2.19 million in foregone revenue, with the highest amount recorded in 2021 at $1.13 million.
Based on the figures released, the Minister for Finance granted a total of 391 discretionary concessions between 2021 and August 2024, amounting to a total of $6.5 million.
While in 2021, the highest number of applications granted was 181, amounting to $1.6 million, the highest amount of foregone revenue under the discretionary concessions category was recorded in 2022 at $3 million.
The unaudited quarterly report on core government finances for the six-month period ending 30 June explained that “many revenues foregone are statute-based (e.g. Stamp Duty Waivers for First Time Caymanian Property Buyers) and are granted once certain specified criteria in statutes are satisfied, whilst others are based on judgement and discretion”.
Roughly 1,107 import duty waivers were granted between 2021 and August 2024 amounting to $3.15 million.
What the law says
The ministry stated that there are Cabinet-approved policies which provide stamp-duty concessions for Caymanians purchasing their first or second properties and as well as on the purchase of undeveloped property on Cayman Brac which make up the foregone revenues.
These applications are processed in accordance with the relevant sections of the Customs and Border Control Act and the Stamp Duty Act.
As for other types of concessions, the ministry said that provisions are made in the law for discretionary stamp-duty concessions by the Minister for Finance and Economic Development under the Stamp Duty Act and the Development and Planning Act concerning the waiver/refund of planning fees.
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