Lan, not so, the BUYER will pay the 10% GST. It's not the same as the Belize Business Tax.

(BTW, there's a hot rumour that the Belize Business Tax is about to be raised for developers from 1.75% to 15%. Talk about the end of development, job creation, tax revenues in Belize.)

Back to GST, a seller HAS to issue a receipt to a buyer showing the selling price AND the GST separately. There is no way to hide from the Buyer that they are paying the GST.

Let's run through it now assuming worst case scenarios:

You want to buy a new condo in Belize. You have a fair idea of the market value. You think it should cost $200,000US.

BUT! your developer now has to add 15% business tax to his price (no way for him to "swallow" that), he has to charge you 10% GST on top of the selling price, your lawyer will charge you 2% closing fees and you'll have to pay 15% Stamp Transfer Tax on the selling price. So, what you think ought to cost $200,000US will now cost you around $290,000US. Any takers?

Chris / Maybe the government wants to halt new construction. That appears to be the case.
No, $90,000.00 tax/fee to close a deal on a $200,000.00 condo. That is not attractive.

Just to clarify a few quick points as they pertain to real estate transactions:
1. GST bill is a proposal - it has not passed yet. When it is refined it will be passed as an act - and then it will be law.
2. The business tax for developers changed to 15% quite a while ago, the same time the real estate business tax went up to 15%. By way of appeal many developers have managed to continue paying the old 1.75% rate, but the law is 15%. Business tax is paid by the entity that is a registered business in Belize, not the buyer.
3. The stamp duties (commonly referred to as transfer tax) is 5% of the purchase price regardless of whether you are purchasing stock shares or titled property, for Caricom citizens and 15% of the purchase price for non-Caricom citizens. If you need to ask - you aren't one.

Yes the taxes are tough right now, and the proposed taxes even tougher. Common sense will eventually prevail, but times might get a little tougher before they get easier.

Share transfer tax...enforcement of a new law that increases the tax from 5% to 15% is now being enforced as of this week....which now means we effectively have Capital Gains Tax but you don't actually have to make a profit to pay the full 15%.

What a disaster. Having a government whose best friends are Chavez and Castro is simply the end of commerce in Belize and will spell an economic crisis of massive proportions. Presumably our government is behaving like Castro and Chavez because working people have a large voting bloc and they think they can win the next election based on populist policies.

It's easy, stick it to "rich" gringos and Belizeans, make it seem like they're paying all the taxes, the workers will rally to the government's side. Well, guess what, if there's no work because no one wants to invest in a country that practices disincentives to economic growth the workers will be poorer because they will be unemployed.

And if no-one is going to invest in Belize the government won't collect taxes.

Now here's a tax that makes more sense:
http://news.bbc.co.uk/1/hi/world/europe/4529574.stm

There is NO WAY a developer can tolerate a 15% business tax in the same way that realtors can. The profit margins, especially for someone like me who wants to build beautiful homes and sell them for a low profit margin in order to appeal to working/middle class folk, won't allow me to "swallow" the business tax. I had plans for 17 new homes and I'm not going to bother now. It's not worth it.

If people like me are going to say "screw it, I'm not going to build" it means construction workers are going to start looking for work and when they don't find it they will have to look for other ways to feed their families.

One or two of these will resort to theft and if there is a crime spree because of it we will probably end up with another murder, another "island crisis" similar to what happened earlier this year.

It is important to look at these matters from the perspective of society as a whole, not just a cozy office. It's easy to say "I'm all right, Jack" but unfortunately Jack, and Pedro and Javier and Juan all have families to feed.

Again, this will all result in a net loss of revenues to the government which means they're not being very clever.

Jesse, sounds perfect, and, by the way, was looking for you at Calander Girls Party at Fidos, Sat nite, could not locate you.
Met your neighbor Boatyard Tom on Monday.
Bridge progress looks good.

Please, let me clearify my position, it related on the Porn part only.
I am not for more taxes, and agree with others on this site, it would kill all Dev in all of Belize, not just AC.

GST and Business tax are 2 completely different subjects. Capital gains tax is not the same as share transfer stamp duties - but again we digress.

It is extremely unfortunate that the Government has had to resort to some harsh measures in order to close a number of loop holes that have allowed too many developers and speculators to get away without paying one penny of tax on real estate transactions for decades. It finally came to the point where the flood gates had to be closed.

The tax department has come to a full realization that the developer 15% business tax rate cannot be levied or sustained. Do you actually KNOW any developer that paid the full rate???? I doubt it.

The tax department is reveiwing the GST bill right now and welcoming and encouraging input from the business community.

I understand that the rate is most likely going to be dropped from the proposed 10% to 9.5%. This means that the sales tax currently being charged at 9% will be going up to 9.5%.

With the GST it's not the rate of tax, rather it's what it'll be applied to that will be hurtful to development. Most new residential developement will cease.

The developer business tax of 15% was shelved earlier this year (shelved but not dropped) by the government after they heard it from major businesses in Belize. THAT'S why it was never charged by developers at that rate, not because they were dodging it. Developers were told to pay 1.75%. I'm certain the government is bringing it up again in order to offer its cancellation to try and make the GST on residential developments seem acceptable.

Amanda, I do agree with you, there are some developers who haven't paid any tax at all, they've build and sold MILLIONS of dollars worth of property, I agree that they owe big time but I object most strongly to having to pay their arrears myself. So should you. But, consider this: If the government haven't been able to enforce their existing tax laws on these people how will they enforce higher taxes?

If all real estate transactions were valued properly and then taxed at just 5% it would be good for everyone, government, developers, employment, investors, EVERYONE. Belize would be an exciting country to invest in. 5% across the board would simplify everything from collection to enforcement. If it could be enforced strictly, no exceptions, Government would make a lot more tax revenue. Not sure they'd manage the extra income properly, though. See below.

You're right, Amanda, Share Transfer Tax or Property Stamp Transfer Tax or GST or Business Tax are not the same as Capital Gains Tax. In reality they threaten to be much more insidious. Capital Gains Tax at least has the advantage of only having to be paid once you've actually made a profit on a major transaction.

The positive influence in any real estate transaction is the buyer. If they feel they're going to be paying 25%-40% tax when they buy a new home they will cancel their plans.

I don't think the problem lies so much with how much tax revenue is generated. Everyone is taking it for granted that this government is broke because they don't collect enough tax. The real reason the country is broke is that government ministers have horribly mis-managed the country in favour of themselves, their cronies and hacks, to the great detriment of Belize. Hundreds of millions in defaulted Government guaranteed loans, massive investment with tax dollars in the cruise ship industry, duty-free concessions being granted to those who don't need them etc. etc.

I'm rambling now, what do I really care, it's just the end of investment in Belize. Doesn't mean much to me, I can leave anytime.