landvaluation.bm Land/ Property Tax Bermuda : Valuation Department
Organization : Land Valuation Department
Type of Facility : Land/ Property Tax
Country: Bermuda
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Website : http://www.landvaluation.bm/
Land/ Property Tax:
Land Tax is a property tax charged on all developed land throughout Bermuda with some minor exceptions.
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The expression “land” is used in its broadest sense to include land, buildings and structures attached to land. Undeveloped land is not liable to tax, though developed land that is merely unoccupied is still liable.
Each piece of property that is liable to tax is known as a “valuation unit” and details describing it and its assessed annual rental value (ARV) are entered in the Valuation List. This List is prepared and maintained by the Director of the Land Valuation Department under the authority of the Land Valuation and Tax Act 1967 (Act) as amended. A printed copy of the Valuation List is available for public inspection at the Land Valuation Department.
The Tax Commissioner’s Land Tax Officer calculates the amount of land tax chargeable on all valuation units and demand notes are issued to taxpayers half-yearly. The amount of tax is determined by multiplying the ARV by the appropriate tax rates.
Why do we have to pay taxes?:
In most communities it has proved beneficial for certain services to be provided by a central body rather than by private individuals either for themselves or for others. The obvious examples of these services are defense, health, education, the emergency services (ambulance, fire and police), public highways, public parks and garbage disposal. To maintain these services, finances must be made available and for such community-wide services, the best method for raising the finances is usually one that involves some community-wide charge or tax.
Why a tax on land?:
Land taxes are some of the most simple, effective, open and cheapest taxes to administer and collect. In addition, revenues from land taxes are both stable and predictable unlike say import duties or an income tax which can fluctuate widely from year to year. Land taxes are also difficult to evade because the liability attaches to the property itself in the final resort. Property taxes also reflect, in general, some “ability to pay” in so far as people with more resources tend to live in higher value properties and this aspect is further enhanced by Bermuda’s progressive land tax structure. Finally, it is fair to say that community-wide benefits tend to impact to a significant degree on property values so that each taxpayer does receive some benefit from the payment of taxes that go to improve the quality of life and the environment in the community.
Who has to pay land tax?:
The “owner” of a valuation unit is liable for all land tax charges. This “owner” is usually the freeholder but can also include a life-tenant, a leaseholder for three years or more and even a periodic (yearly or monthly) tenant or licencee in the case of properties owned by the Government, WEDCO, BHC or BLDC. The Land Tax Officer can advise you more fully if you are in doubt about your liability.
Some residential properties and many commercial properties are let on leases for three years or more. The Act deems these tenants to be the “owner” of the valuation unit for land tax purposes regardless of any provision in the lease concerning taxes.
As the liability for land tax attaches to the property itself in the event that any “owner” defaults on payment, it is important for landlords and/or prospective purchasers to ensure that all land taxes have been paid.
Who may receive relief from land tax?:
Relief from land tax may be available in certain circumstances:
Bermudians 65 or older are entitled to a special concession on part of or all of the land tax payable on the valuation unit that they occupy and appear as the taxpayer for. Please contact the Land Tax Officer on 297-7537 or 297-7669 for details and eligibility.
Circumstances may arise where, through financial hardship, a person is unable to meet his/her tax liability. In such cases, application for relief may be made to the Tax Commissioner who is empowered to defer or provide exemption from all or part of the tax.
If for any period of time a valuation unit is incapable of beneficial occupation, in whole or part, in circumstances such as following a severe fire, or as a result of substantial renovations or serious disrepair, the Director of Land Valuation should be advised as soon as possible. He will amend the Valuation List as appropriate for the relevant period. This does not apply to periods of normal maintenance and repair even if substantial enough for the “owner” not to want to occupy or let the property.
Some properties are to be included in the Valuation List but with a $0 ARV. These include valuation units owned and occupied by the Bermuda Government, the Corporations of Hamilton and St. George, recognized schools, churches as well as properties owned and occupied by certain charities.
When is land tax payable?:
The calendar year is divided into two six-month land tax periods, commencing on the 1st January and the 1st July. Tax is levied in respect of both of these periods and demand notes (bills) are sent to taxpayers commencing January and July.
You may object to a demand note but only on the grounds that you are not the taxpayer or that the tax has been incorrectly calculated. Your objection must be put in writing to the Tax Commissioner within seven days after the service of the demand note on you. The Tax Commissioner will then consider your objection and inform you of his decision.
Who determines the rate of tax?:
The rates of tax are proposed by the Minister of Finance and are subject to the approval of the Legislature. For the current amount of land tax that will be levied on your ARV, go to the Tax Payable page of this website.
Property within the Corporation of Hamilton municipal boundary is also subject to property taxes levied by the Corporation. The Corporation uses the ARV appearing in the Valuation List on which to assess those taxes.