Property tax is coming.
When I told my wife the news, she said, “At least someone’s coming.”
Let’s talk about how property tax is calculated and what you can do if you object to the government’s valuation.
Firstly, the property tax you pay is based on a percentage of the annual rental value of your property. We’ll get to the calculations for residential and commercial properties in a bit. Let’s talk about how the annual rental value is established.
All properties in Trinidad and Tobago have a rental value. That value is a calculation of the rent the property will attract if you decided to rent out the property.
Who calculates this rental value?
According to the OPM’s website, “The qualified professionals at the Valuation Division of the Ministry of Finance”. Hopefully, these qualified professionals are not Customs Officers. If that’s the case, we ass dark.
On a serious note, I really hope these qualified professionals aren’t Customs Officers.
The rental value is calculated on the location of your property, classification, dimensions, modifications and the category of the property, whether it’s agricultural, commercial, residential or industrial.
Let’s talk about how to calculate your property tax.
Earlier we established that the tax on your residential property is a percentage of your property’s Annual Rental Value.
So let’s say you receive a valuation that says your monthly rental value is estimated at $3,000. That means your annual rental value is $36,000.
To calculate your property tax here’s a formula straight from the horse’s mouth.
“the Property Tax Act makes it clear property tax is only three per cent of the annual rental value for residential properties, after first deducting ten per cent from the annual rental value.
So if you receive a rental valuation of $36,000, relax; that isn’t the amount of property tax you have to pay. To calculate your property tax, multiply $36,000 * 90% * 30% and you’ll get $972. I failed maths twice but my wife assured me that 90 percent on a calculator can be written as .90 and 3 percent can be written as .03. The formula looks like this:
36,000 * .90 * .03 which is equal to $972.
Please note that this $972 is the amount you will pay for the year. This is not a monthly figure. I repeat this is not a monthly figure.
Let’s talk about commercial property tax. The one the big boys in Trinidad don’t have to worry about just yet. Talk about the rich getting richer and the poor getting poorer, eh? Commercial Property Tax is 5%. So let’s assume you rent property to the government for $575,000 a month here’s how you’ll calculate your rent. To get the annual rental valuation you’d multiply 575,000 by 12. The total is $6,900,000. Remember, you can deduct 10 percent from that figure; so your formula for property tax is
6,900,000 * .90 * .05 which is equal to $310,500.
At the time of writing it isn’t exactly clear if government will collect commercial property tax. If they aren’t collecting tax on commercial properties, that’s a stroke of luck for the big boys.
You’re probably wondering what happens if the valuation is too high or too low.
Let’s say you live in West Moorings, Lange Park or Palmiste and your annual rental valuation comes in at $36,000. If the value is too high or too low, you can object. In accordance with other grounds outlined in section 19 of the Valuation of Land Act, you can object.
A couple of things to note about objections.
You must object within 30 days of receiving your valuation. The office of the commissioner of valuations within 12 months. So if you submit your objection the same day you get pregnant your child should be 3 months old by the time you get a response.
You can submit your objections online at valuationdivision.gov.tt. Given the government’s track record with software, my guess is the online process would be just as frustrating as the salary relief program. remember the salary relief program during COVID-19?
Oh. One last thing. Objection doesn’t exclude you from paying property tax. It’s kind of how being a member of parliament doesn’t exclude you from renting buildings to the government.
Maybe that’s a bad example.
It’s kind of like when you say the child is not yours but you have to pay child support until the test results come back.
It’s kind of like how a song could be the anthem but that doesn’t exclude you from singing it over.
We’re all just singing along, whether we like the tune or not.
What’s your take on property tax? Let us know in the comments