BY THIS stage, the Government has advanced three main justifications for the long-overdue property tax.
The first is the need for revenue. The second is the idea that the tax is about fairness and equity.
The third relates to the democratic process: the PNM was voted into power in 2015 with a manifesto that pledged the tax; it returned to power in 2020.
Because these separate reasons contradict each other somewhat, it has been all too easy for opponents of the tax to weaponise it.
The confused rollout of a plan to reduce the tax rate last week has matched the ideological jumble, creating a miasma of confusion that plays into the hands of those who seek to ensure the Government will pay a price politically, despite cutting the tax by 33 per cent, through a bill passed in Parliament on Monday. But property tax is justifiable.
If not based solely on its potential to garner revenue or on its standing within the electorate – we need up-to-date polls with proper samples to tell us – the tax is, at its core, about the idea that those most capable of contributing to the Treasury should do so.
Put another way, having property owners pay is a means to make the better-off carry their fair share. That should not be controversial. In fact, it should be wildly popular in a country riven with inequality.
The original land and building tax, established in 1920, was premised on the idea that the more you had, the more you paid. Parcels of land less than ten acres attracted a rate of $10 per acre, with the rate going up to $15 per acre for 11-100 acres, and $20 for land over 100 acres.
But in decades subsequent, the system became murkier because of local government laws, such as one passed in 1996, which made cities and boroughs subject to separate rules.
Valuations came into play, but they lagged or were done at different intervals, if at all. The current law seeks to introduce a standard rate. The proposal is now two per cent of annual rental value (ARV).
This has removed the hierarchy within the original tax, but also evened the playing field geographically.
At the same time, the use of ARV, imperfect as it is, achieves more precisely the same idea that those with more should pay more. That is only fair.
Therefore, the Government should bolster the appeals process for valuations to ensure it is not burdensome, considering the inevitable variations that will ensue, given that property valuation is an art, not a science.
Meanwhile, it is time to put this matter to rest so we can focus on the real issues, such as the need to protect vulnerable renters, poor building standards and the lack of affordable housing in the country.
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