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HAMILTON, Bermuda, Feb 10, CMC – Finance Minister Curtis Dickinson has scrapped a proposal to introduce a tax on rented homes in this month’s Budget, saying it has been taken off the table.
Dickinson made the announcement on Friday after complaints surfaced that landlords had tried to use the suggested levy as an excuse to increase rent.
The Finance Minister said he made it clear the residential rental tax would not be implemented to avoid the exploitation of tenants.
The minister told media he had other plans to boost government revenue as the island grapples with a national debt of US$2.4 billion.
The island’s senior citizens had already voiced their opposition to the tax proposal after the charity Age Concern Bermuda called on its members to express their views.
“Eighty-four per cent of respondents were not in favour of a rental tax and of those 94 per cent expressed that seniors should be exempted from a rental tax, should it be imposed,” the charity said in a recent statement.
Hours before Dickinson announced he was scrapping the proposal, a joint press release from the Ministry of Home Affairs and Ministry of Finance hours earlier repeated that no decision had been made to implement the levy after landlords’ attempts to hike rents were made public.
“This clarification is provided in response to phone calls to Consumer Affairs from tenants reporting that their landlord has informed them that their rent will be increased ‘due to the new tax’ as of March 1. Consumer Affairs has addressed this behaviour with the offending landlords.”
Dickinson said later that he had decided to go a step further.
“I just thought it was important to be very clear that the behaviour that was referenced in the press release needs to stop, because there’s not going to be a rent tax for residential properties.The best way to do that was to make a public statement.”
He added: “I was getting a lot of concern on my part around people potentially being taken advantage of.
“I have formulated a view on how I intend to take this forward.”
Dickinson said his tax plans will be revealed when he delivers the annual Budget on February 22.
Dickinson said many people were opposed to the levy which, combined with a tax on commercial properties, was expected to rake in $41 million.
Shadow Finance Minister Nick Kempe said: “It was clear there was widespread opposition to the residential rental tax, which was causing anxiety among our elderly population in particular.
“Although the tax was among a raft of new taxes being considered, government intended to raise taxes by $50 million in 2019-20 and residential rental taxes were set to raise $26 million.
“So, given that 2018-19 still had a Budget deficit of $89 million and given that government has not cut any costs, what tax will replace the rental tax after this about-face?”
“This government has already introduced new taxes and it is clear its only plan is to introduce more,” Kemp said.