Highlights of the 2018/2019 Budget

The 2018/2019 budget communication has been debated and passed in Parliament. In it, the government has outlined a number of policy changes and initiatives which will impact the real estate sector and the wider Bahamian economy.

Photo Credit : The Tribune

 

 

We have outlined some of the key budget highlights below.

 

 

* An increase in the value added tax (VAT) rate from 7.5% to 12% effective 1 July 2018.

 

* The Real Property Tax Act is being amended to clarify the definition of owner-occupied.

* The Real Property Tax on foreign-owned vacant land will increase from 1.5% to 2% of value.

 

* VAT is exempted on Real Estate transactions. A rate of 2.5% stamp tax will be levied on transaction values up to $100,000 and a rate of 10% on values $100,000 and above.

* VAT will be waived on residential electricity bills at or under $200 and water bills at or under $50.

* The First-time homeowners stamp tax exemption is being extended for 5 years.

*The elimination of VAT on residential property insurance.

*Government has approved the increase of the minimum threshold for economic permanent residence from $500,000 to $750,000 with effect July 1, 2018.

 

*The duty exemption on materials used for the renovation, repair and upgrade of dilapidated buildings will be extended for 2 years.

* The government is extending the 0.75 per cent Business License fee rate, currently applicable to hotels with turnover over $400 million, to all hotels with 10 rooms or more.

 

 

* The City of Nassau Revitalization Act and the Family Island Development Encouragement Act are both being extended for one year

* Duty on solar kits will be eliminated upon application to the Ministry of Finance.

* Duty will be eliminated on airplanes and helicopters in an effort to build an Airplane Registry Industry

*Government is providing duty-free entry for goods for use in the commercial printing industry, as well as for processing and garment manufacturing equipment without the need to apply for specific concessions as before.

* The waiving of duty on clothing and shoe imports upon application by importers and retailers

* Government is providing for the VAT zero-rating of fundraising activities held by charitable organizations

The Customs personal travel exemption is being increased from $300 to $500 per person

* The excise duty on electric and hybrid vehicles valued at $50,000 and under is being reduced to 10 per cent.

* An increase in the taxation of gaming house activities through the introduction of a sliding scale of rates applied to taxable revenue, namely:
up to BSD 20 million, a rate of 20%;
between BSD 20 million and BSD 40 million, a rate of 25%;
between BSD 40 million and BSD 60 million, a rate of 30%;
between BSD 60 million and BSD 80 million, a rate of 35%;
between BSD 80 million and BSD 100 million, a rate of 40%; and
over BSD 100 million, a rate of 50%;

* An increase in the taxation of gaming patrons through a 5% stamp tax to be levied on both deposits made by patrons at the gaming houses and any non-online games/digital sales.

* The elimination of VAT on “breadbasket items” from 1 August 2018, with the exception of sugar, which will be removed from the list of breadbasket items (includes butter, cooking oil, rice, flour, bread, etc.);

* The elimination of VAT on medicines.

Leave a Reply

Your email address will not be published. Required fields are marked *