The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading attorney yesterday said there was still time “to fine-tune with certainty” the latest first-time buyer Stamp Duty exemption, as he admitted the profession had been unable to “decipher” the Prime Minister’s Budget statement on the subject.

Adrian White, an attorney with Delaney Partners, and head of the Bar Association’s real estate committee, told Tribune Business there was “a very small window left” to ensure the new five-year exemption was infused with more certainty than its existing counterpart.

He added that the Bar committee had put together several recommendations to make the Stamp Duty exemption process operate more smoothly, and was attempting to arrange a meeting with the Exemption Office to discuss these.

Mr White confirmed that both attorneys and realtors had been unable to accurately interpret Prime Minister Perry Christie’s remarks on the subject during the 2013-2014 Budget communication.

In announcing the Government’s plans, 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”.

Realtors had previously told Tribune Business that the Prime Minister’s comments had only served to cause more confusion and uncertainty over how first-time buyer Stamp Duty exemption applications would be treated.

Mr White agreed, although he said there was still time to clean up any ambiguity before the new exemption was implemented come July 1.

“We haven’t been able to decipher what was meant by that,” he told Tribune Business of the Prime Minister’s comments. “What does ‘flexibility’ mean? That’s the question. It doesn’t clarify anything from what we’ve been dealing with previously.

“Any uncertainty and ambiguity is something we as practitioners have begun to prepare ourselves for, and advise clients on, without taking any liability.

“It’s ultimately at the discretion of the Treasury, and we have to make clients aware of what the outcomes might be based on our experiences and what is reflected in the law.”

Tribune Business understands that the Prime Minister may clarify what he meant when he wraps up the 2013-2014 Budget debate, and Mr White said there was still time to ensure the latest exemption version operates with maximum efficiency.

He explained that the exemption would be put into law via an amendment to the Stamp Act and, while the public would see it merely as an extension of the existing version, Mr White said that in reality they were two different instruments.

“Right now, I think it might be a little bit the same as before,” he said of the 2013-2018 version, “but there’s an opportunity to get it fine-tuned with certainty once it’s put in place.

“I’m hoping that with a very small window left we’ll be able to get it [the new exemption] into a better position than it was in the past.

“Our intention is getting the uncertainty to be something in the past as we go with amendments and new legislation in the Stamp Act with respect to first-time buyers.”

Both the Bar Association and the Bahamas Real Estate Association (BREA) 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.

Mr White said the only current certainty was that the first-time buyer Stamp Duty exemption had been extended.

Adding that the Bar Association’s real estate committee was still compiling recommendations, which it plans to submit to the Government, on eliminating uncertainties and ensuring the process worked more smoothly, Mr White said it was seeking a meeting with the Exemption Office.

“Hopefully we can all work together to have a defined plan and a defined product that passes through the system more expeditiously once it has been prepared properly,” he told Tribune Business.

“We’ve made recommendations as to who qualifies, who does not qualify and identified what types of consideration are made available under the exemption bracket.”