President of the Bahamas Real Estate Association (BREA) Carla Sweeting said the government's intent to clamp down on real property tax payments leaves more questions than it does answers.

As a part of the government's four-pronged, multi-year tax and compliance initiative, "some 15,000 properties have been identified as having either not been valued, as grossly undervalued or having the incorrect usage - that is, commercial properties are classified as residential", Minister of State for Finance Michael Halkitis told Guardian Business yesterday.

Halkitis pointed out that the four initiatives "are targeted to yield $40 (million) to $80 million in additional revenue, within the coming six to 12-month timeframe."

Subsequent to Halkitis' mention of the compliance initiative last week at a Bahamas Institute of Chartered Accountants (BICA) Accountants' Week 2016 event, the Ministry of Finance announced on Sunday night that it intends to inform 5,000 property owners that they are underpaying their real property taxes, either because the valuations are out of date, the properties are misclassified or they are unregistered entirely.

The ministry said in the coming weeks, another round of notifications would be issued to owners of properties that are either not registered for property tax or misclassified.

"These properties are in higher value or upper-middle class communities," the ministry said. "The value of these properties will be assessed, if they were not assessed during the last five years."

However, Sweeting asked, "How are they going about assessing it or reassessing it? Is it purely based on what you paid for it? Well that's fine. But, you also have to quantify it by saying how long ago did you buy it and are you going to require them to appraise it periodically.

"Will home owners be required to have their properties assessed every five years?"

While speaking with Guardian Business yesterday, she also questioned how the government would determine which properties would be considered higher or upper-middle class.

"Is the government going to put a classification on location, and if so how are they going about doing that?"

The four-pronged initiative will look at real property tax, business license fees and value-added tax (VAT), post clearance custom audits and a risk-based container inspection program under the surveillance of an established project team.

Xian Smith, Guardian Business Reporter

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