The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The VAT rate increase has made home ownership "almost impossible for some and a lot harder for others", a prominent developer said yesterday.

Franon Wilson, pictured, Arawak Homes president, told Tribune Business: "From where we sit right now, the demand for home ownership is very strong. The change in VAT is a challenge for a lot of people in that some persons are no longer able to qualify.

"There are others who were initially able to get a home in a certain area at a certain size, but may now have to look at a smaller home in another area. There is also the fact that developers are still no longer able to claim their input credits. That would have an effect on the cost of a home. As a result, that now has to be added to the cost when we purchase the property and will increase the price of homes moving forward."

While the 60 percent hike in the VAT rate will raise construction costs, the government has also decided to revert to the old real estate transaction tax structure - going back to ten percent stamp duty from the previous 7.5 percent/2.5 percent split between duty and VAT.

Mr Wilson, a former Bahamas Real Estate Association (BREA) president, continued: "We are optimistic. Demand is strong notwithstanding what people are faced with relative to VAT. People are now being forced to make some decisions they wouldn't ordinarily have to.

"We can say for sure the change in VAT rate has definitely made home ownership not possible for a lot of people, and harder for others, because of the fact that many no longer qualify for as much as they did.

"Some people are forced to build smaller homes as some areas have restrictive covenants where your home has to be a certain size. That has forced some people to look at having to sell their property and go and build somewhere else. These are real issues that people are having to deal with."