The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Top realtors yesterday said Prime Minister Perry Christie would “do wonders” by clarifying his Budget comments on the first-time buyer Stamp Duty exemption, warning that they had only caused more “confusion” and uncertainty.

Mike Lightbourn, head of Coldwell Banker Lightbourn Realty, told Tribune Business that Mr Christie’s 2013-2014 Budget communication had done nothing to eliminate“the limbo state” the ‘$500,000 and under’ first-time buyer market had suffered in for several years.

While the Government had extended the first-time buyer Stamp Duty exemption for properties valued at $500,000 for another five years, until end-June 2018, Mr Lightbourn said the uncertainty resulting from the Prime Minister’s comments would only depress this critical market segment.

The Bahamas Real Estate Association (BREA) and its members had been pressing the Government to both extend the first-time buyer Stamp Duty exemption, and clarify uncertainties surrounding how it is applied and processed.

Tribune Business had previously revealed the confusion being caused by the Treasury’s practice of adding the mortgage value to the conveyancing value - a tactic that often pushes a first-time buyer transaction beyond the $500,000 qualifying cut-off.

This resulted in the stalling, or abandonment, of some first-time buyer purchases, and the Prime Minister’s Budget comments failed to shed any light on whether this situation will be resolved to the satisfaction of all.

Addressing the House of Assembly last Wednesday, Mr Christie said: “The Stamp Tax exemption granted to first-time homeowners will be extended for an additional five years to June 2018.

“And, within the $500,000 cap, flexibility will be permitted as to the proportions allocated to the conveyance and the mortgage.”

This, Mr Christie added, would “remove the contradiction that existed” where first-time buyers were “getting the exemption on the conveyance, and not on the mortgage”.

But the Prime Minister’s remarks appear to have raised more questions than answers, at least for the real estate industry.

“It’s confusing. What does it mean? Mr Lightbourn told Tribune Business in response to the Prime Minister’s comments.

“It’s ambiguous. We need clarification. We’ve been in this limbo state for several years now. He’s the Minister of Finance; he should come out and give a proper directive so there’s no misunderstanding.”

Tribune Business has been attempting since last Thursday to clarify what the Prime Minister said with Michael Halkitis, minister of state for finance. Despite e-mailing this newspaper that he would reply to its queries, the Minister has yet to respond.

Meanwhile, Mr Lightbourn reiterated: “It’s not a proper explanation. It’s not clear, I don’t know what it means.

“We’ve all lost sales because the banks require the Stamp Duty money to be paid up just in case the buyers have to pay it.

“He [Mr Christie] would do wonders if he would just come out and let the whole world know exactly what that means.”

Mr Lightbourn is not the only senior realtor confused by the Prime Minister’s comments.

Larry Roberts, Bahamas Realty’s chief executive, told Tribune Business yesterday he had been hoping that the attorneys would have successfully decoded the Prime Minister’s remarks.

“He certainly hasn’t clarified it enough for myself,” Mr Roberts said. “What does it mean? I can assure you that if it’s left to the civil servants, they’re going to err on the side of caution and they’ll charge you [Stamp Duty].”

He added that first-time buyers were not entitled to Stamp Duty exemption on their mortgage before, expressing surprise that this had entered the equation via the Budget communication.

Assessing the wider post-Budget fallout, Mr Roberts said: “Every day there’s a new revelation. Seeing the comments, the revelations in the paper today, the construction industry and the Business Licence fee, oh my God.

“They’re not making money now; few businesses are. It’s like we’re trying to stand up and are getting chopped off at the knees.”

Criticising both FNM and PLP administrations, Mr Roberts told Tribune Business: “Successive governments have never understood the need for businesses to be profitable.

“If businesses are profitable, the country benefits through increased employment, Customs duties. But they [the Government] think what they’re doing is stimulating the economy. It’s doing the opposite.

“I really don’t get it. You’d think any government would want to be seen as a government under which the country prospers. Under the FNM it was the same. There’s no difference. I don’t get it.”

And another real estate industry executive, in an e-mail to Tribune Business, added: “Can [you] find out specifically what the PM meant when he said that “within the $500,000 cap, flexibility will be permitted as to the proportions allocated to the conveyance and mortgage?”

“What does he mean? That this is discretional? What will the decision be based on? What are the criteria? It seems to me that if this isn’t spelled out, the confusion will continue.”