Property Tax - A Tricky Issue
Property Tax is really a tricky issue. One would quickly think that this is a fair tax, on the grounds that those who own more property would pay more tax. Ideally, Property Tax should lead to some sense of equality since it would be more difficult for large landowners to own too much unproductive property at once, so it would be available - whether on the market or somehow else - for others to have a chance of owning it. This, however, is an idealistic simplification.
We understand that the Property Tax rates were not increased, but that the value of properties were updated from their 2002 valuations to their 2013 valuations. Still, the new amounts owed are very high, sometimes as high as 1000% of what they were before. We have to remember that our economy has been growing, so the value of our land and other things will go up. We also have to remember that our currency value had fallen sharply between 2002 and 2013.
You may be asking why increases in Property Tax would hurt poor people, if most land is owned by wealthy people. When Property Tax costs more, it raises the bar for those who are able to afford to own property, so less persons will be able to afford to formally own property. We can look at specific groups of people who will be affected by this.
We can first look at people who live in informal settlements, and who are commonly referred to as "squatters" on the land that they occupy. Some of these persons try to legitimise their land claims by paying taxes on the land that they occupy. With Property Tax being more expensive now, it will be more difficult for them to do this, so even less of them will be willing to pay to legitimise their land claims. In general, the government has claimed to realise that direct taxation like Income Tax is more difficult to collect, and it is common sense that there will be less tax compliance when the taxes are higher. The landowner who isn't using his land will no longer be worried that poor people will be able to afford to pay taxes to legitimately occupy it; now he can refuse to pay taxes on time, and still manage to own the land.
Another group we can look at is pensioners. With a fixed and limited income, it is difficult for home-owning pensioners to pay the Property Tax when it is now more expensive. This may encourage some pensioners to be willing to sell their larger homes to move into more modest dwellings, leaving larger homes on the market, but this would assume that all of the negatively-affected pensioners are living lavish lives when this is surely not the case.
We can talk about farmers, whose increase in expenses will make it more difficult to produce goods that can be sold at "competitive prices" compared to agribusinesses from other countries. It may become more difficult for our farmers to export their goods, and more difficult to keep our local producers from importing too much goods from countries that have it cheaper.
We can talk about small business owners, whose increase in expenses - whether from property that they own or rent - will make it more difficult to offer goods and services at competitive prices compared to those offered by much larger businesses.
We can talk about the youth, who already find it difficult to own their own homes. When they rely on renting places to reside in, they are still affected by this, as increased property taxes for landlords will mean increased rent for tenants.
We can talk about working people who are either poor or in the lower-middle class, and who manage to own homes that have been passed down to them over the years, or that they got through a decades-long mortgage plan. It is now more difficult for them to afford to own their homes. We can look at a place like Downtown, Kingston; here, land developers have been going around and making offers on buildings and lots. Digicel's construction of its new headquarters in the area has been coupled with talks of a 'revival' or 'rejuvenation' of Downtown. Even New Kingston and other places have small residential lots, surrounded by high-value commercial or industrial developments that would drive up property value. With demand and value of the properties gone up, there would be more pressure on even unwilling landowners to sell their land; here we speak of the poor landowners, not the wealthy landowner. If they cannot afford to pay their property taxes, they could be pressured to sell the land against their will.
Property Tax is a tricky and delicate issue. We should not want to make it more difficult for people to own their own homes, but we should still find ways of creating disincentives for persons to own large amounts of land that they do not use, so that this land can be available for occupation, use, or even ownership by willing persons. Property Tax should be a disincentive for the concentration of property in a few hands, but the way it seems to function now is that it makes it more difficult for the average man to own property, while making it easier for those with enough capital to make land grabs as poor people are unable to afford to keep the little property that a few of them have.