The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A realtor is questioning whether the recent New Providence-wide real property tax revaluation violated Bahamian law because it used an overseas contractor to perform appraisals.

David Morley, Morley Realty’s principal, told Tribune Business that engaging US-based Tyler Technologies to conduct valuations seemingly violated the Real Estate (Brokers and Salesmen) Act 1995 which mandates that only appraisers licensed under this law can perform such work in this nation.

To obtain such a licence, appraisers must either be Bahamian or a permanent resident with the right to work - a description that does not apply to Tyler Technologies. Mr Morley said he had raised the issue with the former Minnis administration but his concerns never received a response from Carl Bethel QC, the then-attorney general.

“In all fairness, in my opinion, it was illegal,” he said. “The Real Estate (Brokers and Salesmen) Act 1995 stipulates that anyone providing third party real estate services for properties has to be licensed under the Act. And only Bahamians or permanent residents with the right to work can be engaged to provide appraisal services for properties.

“I brought it to the attention of Carl Bethel, then the attorney general, and he turned a blind eye.” Mr Morley said his opinion had been strengthened by a past Supreme Court case, in which he had been asked to provide evidence as a “professional witness”, that was held before former justice John Lyons.

The case involved an appraisal performed on a piece of Bahamian real estate by a Florida-based appraiser who was not licensed to work in this nation. Mr Morley recalled how former justice Lyons determined that neither the appraiser nor his work could take the witness stand or be included in evidence because he had been operating in The Bahamas in breach of the Act.

Similar reasoning, he argued, could be employed over the role played by Tyler Technologies in appraising property values. Speaking amid growing complaints from some residential and commercial property owners over tax hikes that have seen their 2022 real property tax bills double or triple, Mr Morley suggested the Government look at other potential reforms.

In particular, he backed calls by his fellow realtor, Christopher Armaly, who previously said the newly-elected Davis administration should seek to raise a $60,000 annual real property tax cap that results in middle class Bahamians effectively paying a higher tax rate than persons with homes valued $10m and above.

“The one thing I agree on with my friend, Christopher Armaly, is they have to raise the real property tax cap of $60,000 or get rid of it altogether,” Mr Morley told Tribune Business. “I heard some properties sold out west, including one in Old Fort Bay, which sold for $45m.

“He told me that, at $60,000 a year, that equates to home worth about $10m. Some $35m worth of property went untaxed. They should be paying something on that. We have to look at that very closely.”

All owner-occupied homes, meaning those residences used exclusively as dwellings by their owners, enjoy a tax break on the first $250,000 of their property’s valuation. A rate of 0.625 percent is applied to the next $250,000, and this increases to 1 percent for the remaining portion of the valuation above $500,000.

However, Mr Armaly previously told this newspaper that the $60,000 maximum limit on annual real property tax payments effectively leaves a $40m property owner’s tax rate at just 0.15 percent. This is four times’ below the rate applied to the $250,000-$500,000 portion of a property’s worth.

Applying the cap to properties valued at $30m, $20m and $10m results in effective tax rates of 0.2 percent; 0.3 percent; and 0.6 percent respectively, all below the property tax rate that middle class Bahamians - who have less income and ability to pay - face on owner-occupied residences between $250,000 and $500,000.

Highlighting this as a regressive aspect of The Bahamas’ real property tax regime, Mr Armaly has urged the Davis administration to increase the real property tax cap to at least the low five-figure/high six-figure range to ensure that wealthy citizens and residents pay their fair share in taxes.

Mr Morley, meanwhile, said another potential reform involves the blanket real property tax exemption afforded to all Bahamians who own Family Island real estate. He argued that this was a policy, rather than statute law, that was designed to stimulate Family Island economies by encouraging Nassau residents to build second homes there.

“I have no problem with that encouragement,” Mr Morley added, disclosing he had built a second home in Abaco post-Dorian that had aided the economy and helped to create construction employment.

Yet he added: “What is written in law is that all properties in The Bahamas are to be valued..... And the constitution of The Bahamas makes all people equal. This policy doesn’t. For those people in the Family Islands who have a $250,000 or more first home, they clearly have the wherewithal to pay real property tax.

“Real property tax goes towards paying the cost of schools and infrastructure. What are Bahamians [in the Family Islands] contributing to that cost because they are not paying tax? I’m not trying to be unreasonable. I’m trying to be fair and reasonable to all Bahamians.”