The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior realtor yesterday warned that real property tax billings are "causing havoc", revealing how one client was hit with a $125,000 bill for a Long Island lot he did not even own.

Mike Lightbourn, who heads the Bahamas Real Estate Association's (BREA) appraisal committee, told Tribune Business that the errors and over-valuations he had seen among the latest real property tax bills were "almost unreal".

"These bills that are going out, they're all over the place," he said. "There are so many mistakes it's almost unreal. "It's causing havoc now. You get a bill and get threatened if you don't pay it.

"I have a client who was sent a bill for $125,000 for a lot in Stella Maris [in Long Island] showing a total amount outstanding, including arrears, of $125,000. The client had to go and get a 'last owner of record' to show the Real Property Tax Department they never owned the lot. It was owned by somebody else."

Mr Lightbourn cited this as an example of the problems caused by incorrect assessments and billings, added that his own investigations into the Stella Maris 'lot' revealed that the land in question was "in the bush", inaccessible and with no road connection.

"It's a lot in the bush at Stella Maris," he disclosed. "I went to look at it and couldn't find it because it's in the bush. You can't properly get to it; no one will buy it. My client doesn't own it; they've never owned it.

"You can't even get to it. It's worth virtually nothing. Somehow that rubbish got into the system, and I'm questioning how much more rubbish got into the system."

"They're [the Department of Inland Revenue] all over the place. Abaco is going crazy. They're over-assessing everyone, even on sales. They've all of a sudden decided to bump up valuations; some are justified, some are not. It's causing havoc."

Mr Lightbourn said the problems had impacted him personally, as he had received a $29,000 real property tax bill - including arrears - for a property in Eleuthera he, too, has never owned.

He explained to Tribune Business that he bought one of two land parcels from a vendor who owned property on "both sides of the road", but did not purchase the other. Yet the Coldwell Banker Lightbourn Realty president said the Department of Inland Revenue seemed to believe he owned both, hence the arrears billing.

"They threatened me that I owed $29,000 in arrears; $29,000 in arrears on on side of the road," Mr Lightbourn said. "But I don't own that property; I never have. They've billed me as if I own the other side, too.

"You get these threatening letters that if you don't pay in so many days... This is causing all kinds of upset."

Mr Lightbourn confirmed he had been contacted by Abaco-based realtors over their concerns that "crazy" real property tax assessments and billings on that island were threatening to "tear apart" its real estate market and undermine its second homeowner-driven economy.

James Rees, a broker with Abaco Island Properties (Bahamas), told Tribune Business last week that the Department of Inland Revenue "seems to be completely out of control as to valuations of property owned by foreigners".

He added: "The complaints have rolled in over the last few years, and now seem to be across the board. Several clients have already dumped their properties and will never return to the Bahamas. The tax increases have been outrageous and have been noticed by myself, many other realtors and, most of all, the property owners."

Mr Rees was backed by Bill Albury, of Damianos Sotheby's International Realty, who told Tribune Business that the increased real property tax bills - which in some cases have more than doubled - were threatening to "tear apart" Abaco's real estate market and second home economy.

"It's going to be pretty dramatic as you may well imagine," he said of the impact, "because some of these foreign buyers have held property for many years and been assessed at a certain rate.

"In some instances the rates have doubled, and it's happened for no apparent reason. People are absolutely alarmed, objecting and requesting a review. In the meantime, their accounts are not being paid, so they're being turned over to collections agencies who are calling and threatening property owners, which is crazy."

Mr Lightbourn suggested the Department of Inland Revenue's biggest hindrance when it came to real property tax bills was "a lack of manpower" and inadequate records, which left it unable to keep property valuations and assessments current.

"The main thing is they don't have the manpower to put proper values on these properties, and don't have the proper record keeping; garbage in, garbage out," he told Tribune Business. "The over-assessments are a disaster, and they don't accept anyone's appraisal."

The Coldwell Banker Lightbourn Realty chief cited Bahama Sound in Exuma, which is made up of 20 different subdivisions. He said the Department of Inland Revenue treated them all as being the same when conducting real property tax assessments, ignoring the fact that some have utilities and infrastructure while others do not.

"Some are up in the bush with no roads and are not comparable, and they charge the same as a lot in a subdivision where there is direct access," Mr Lightbourn said. "It's a bloody mess. It needs to be cleaned up. It's a massive issue that all boils down to manpower. They need to respond to people's letters, which they don't."

He added that in the same way that the Commercial Enterprises Act mandates the Department of Immigration to 'fast track' work permit approvals for targeted industries, otherwise they will be deemed approved if no response is received within 14 days of submission, Inland Revenue should be required to respond to all challenges within the same timeframe.

"The same should happen with real property tax," Mr Lightbourn argued. "If they don't respond to a letter within two weeks, it should get approved."

He added that other problems stemmed from the Department of Inland Revenue using a standard 'value per square foot' formula to value properties, which he argued was inappropriate for the Family Islands.

Mr Lightbourn said there were also issues with real property tax assessments still being based on values from the 2005-2007 'boom', while the failure to carry out more frequent valuations had meant persons suddenly received bills far in excess of what they have been paying.

Emphasising, though, that not all was the Government's fault, the veteran realtor said few taxpayers send in an annual estimate of their property's value - as they are required to do by law.

Successive governments have been lax in enforcing this, and Mr Lightbourn added that he had no sympathy for non-payers, defaulters and tax delinquents seeking to evade paying their fair share.

"If you're a visitor in our country, you should be prepared to pay your fair share," he said.