It has happened. You bought your home, you are enjoying your own space but suddenly you have to pay property taxes. You then realise that you have no idea where to start your property tax journey.
While property taxes are a common payment for all homeowners, many Trinibagonians still struggle to understand what it is and why it exists.
Here are some of the key things you need to know about property tax in Trinidad and Tobago.
First off, what is Property Tax?
Property tax is a payment on the value of a property that is levied by the government of the country in which the property is located. In Trinidad and Tobago, all land is subject to tax. This includes land that has buildings, structures, machinery, plants, pipelines, cables, fixtures and water. The payment of these taxes is just like any other tax we pay in Trinidad and Tobago. The revenue is utilized for the maintenance of public goods, such as schools, roads, government buildings and other infrastructure that is necessary to keep a sovereign country operational.
How much do I have to pay and who am I paying it to?
The person who is deemed the owner of the land is required to pay their property tax to the Board of Inland Revenue. The tax is determined by two main factors the “annual rental value” also known as the ARV, which according to the Property Tax Act, “means the annual rental value of land as determined by the Commissioner of Valuations under the Valuation of Land Act.” This value is calculated by five main factors:
- The Location of the Property
- The Classification of the Property
- The Category of the Property
- Property dimensions
- Modifications or renovations to the property
The other is the “annual taxable value” also known as ATV, of the land, which is the rent that the property will let annually after a deduction of 10% voids. This figure is then multiplied by the percentages set out in Schedule I in the Property Tax Act. These are as follows:
Residential land is taxed at 3% of the ATV.
Commercial land is taxed at 5% of the ATV.
Industrial land is divided into two sections. “Plant and machinery housed in a building, which is taxed at 6% of the ATV; and Agricultural land, which is taxed at 1% of the ATV.
Essentially, the annual rental value minus the 10% voids are multiplied by the above percentages to calculate the yearly property tax amount. Homeowners can estimate this figure through this calculation, however, after the valuation return form is filled out and the house has been inspected by the Valuation Divison, homeowners will receive an exact figure for their property tax.
Is vacant land taxed?
Vacant land is not exempted from property tax. It also has an Annual Rental Value (ARV) that is calculated by taking a percentage of the Current Market Value of the land and the property tax is determined by taking a percentage of the Annual Taxable Value (ATV).
The tax rates for vacant land are as follows:
Residential land is taxed at 2% of the ATV.
Commercial land is taxed at 3.5% of the ATV.
Industrial and commercial land is taxed at 5% of the ATV.
If the above information still seems confusing, we invite you to make contact with the Board of Inland Revenue to guide you on your property tax application process.
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