By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
A top realtor has warned the Government that it will discourage more Bahamians from opening their own businesses if it decides to levy Value-Added Tax (VAT) on commercial real estate sales and leases.
Speaking amid the ongoing uncertainty over whether VAT will be charged on commercial real estate deals, Mario Carey, head of Mario Carey Realty, told Tribune Business: “I think there’s room for concern, any time you increase the cost of doing business in an environment where business is not happening.”
Acknowledging that the Government needed revenue to plug its projected $443 million fiscal deficit, and cut the $5.5 billion national debt, Mr Carey said the Bahamas needed to incentivise real estate activity, not do the opposite.
As to the implications if the Government did impose 15 per cent VAT on commercial property sales and leases, he added: “It’s going to cause people not to be opening up businesses; they just can’t afford to go into business.
“I’ve been speaking to people from Barbados, and it’s [VAT] totally killed their industry - real estate and everything else. They’ve got VAT, income tax and Customs duties.”
Tribune Business has repeatedly attempted to find out from the Government whether it plans to levy VAT on commercial real estate deals, but without success.
John Rolle, the Ministry of Finance’s financial secretary, said last week while off-island that he would attempt to confirm the Government’s position, but has yet to do so.
In an earlier e-mail, he had told this newspaper: “The White Paper proposal as regards commercial property will have an explicit response when the draft legislation is released by the Government.”
That has yet to happen, and while the White Paper treats residential real estate sales and leases as ‘exempt’, meaning 15 per cent VAT will not be levied on purchasers/tenants, it made no mention of their commercial counterparts - thus leaving open the possibility they will be subject to VAT.
Other realtors, too, expressed disquiet at the resulting uncertainty,.
Mike Lightbourn, president of Coldwell Banker Lightbourn Realty, told Tribune Business: “It’s all up in the air. I’m concerned, but I have to know what it is first.
“If we’re going to add 15 per cent to broker commissions, 15 per cent to appraisals and 15 per cent to commercial real estate, things are slow now in that field.
“I hate all this speculation before they come up with something concrete, but it’s all over the place. It’s [VAT] not going help. It’s a slow time, and this bloody VAT is coming at the wrong time,” Mr Lightbourn added.
“We’re going to be in deep trouble next year. I hate to be negative. Still, it’s a good time to buy real estate. There are bargains out there, and people should think about it if they can.”
Comments
John 11 years ago
On of the most troubling experiences is to drive through the city of Nassau and see the number of business that have closed down, an the number that continue to close down on a regular basis. In some areas of Bain and GrantsTown, virtually all the mom and pop stores have closed and those that remain open have more empty shelves than what goods they have to sell. A Clear sig that these communities and severely depressed economically, and one an only imagine the challenges residents must face on a daily basis in the game of survival. What is even more troubling than the barred, up and empty and abandoned stores is the amount of web shops or number houses that tend to invade these areas. They seem in a hurried race t suck the few remaining dollars out of these communities, and no one seems willing to shut the gate n them or, at least regulate them. So while the operators build stately mansions in the priciest pars of the country, Paradise Island and Lyford Cay included, plan lavish social event, where cost is no objective, purchase boat and yatchs and the fanciest of cars many of these people not only go to bed hungry but many of them have no clue s to where the next meal for them or their children s coming from. Add to this misery Value Added Tax come July 2014 and you can see t is an opportunity for disaster. Small businesses keep the economy afloat because they turn over their money more and generate new wealth, So when they are all closed and when the web shops continue to suck the few remaining dollars out of those communities the VAT spells disaster.
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