SIN / I am going to be talking about that very subject next week with Herm Penland at Southwind. I'll let you know what's up. Man, it could mean lots more money for the stamp duty at closing time. Rules might be different if you are receiving shares in a corporation instead of clear title. I'm keeping my fingers crossed.
"Nothing can bring you peace but yourself"
#185277 - 12/12/0509:55 PMRe: GST on property sales?
Regarding GST, yes, under the present version of the Bill (which hopefully can and will be changed) GST will apply to the buyer of the following types of property sale:
Any newly built condo, house, villa, ie. you're a developer, buy a piece of land, build homes on it, sell them. Your buyers will pay the 15% Transfer Tax AND 10% GST. Except they won't want to pay 25% tax which means they'll buy in Panama or Costa Rica instead. Any newly remodelled house that was purchased for the purpose of remodel followed by immediate resale. Any commercial property such as a hotel.
It's a very alarming tax which will make it almost impossible for those wanting to own their own home in Belize to justify buying a newly built home. They would be better off buying an already-lived-in home which is not taxed under this new system.
Theoretically even homes newly built by DFC will "attract" this most heinous new tax.
#185279 - 12/12/0511:52 PMRe: GST on property sales?
Pam&Dave, if you make a real estate purchase and it falls under a GST-taxable category you pay 10%. It has nothing to do with the Stamp Transfer Tax. The GST won't disinguish between corporations, individuals, Belizeans or Aliens.
#185280 - 12/13/0505:43 AMRe: GST on property sales?
This is not good news. The frustrating thing about working on a long term plan for living in Belize is that the "rules" are constantly changing. At some point it becomes too risky and uncertain to put hard earned investment dollars into a system that is in constant flux. If they impose this tax on new construction and on all commercial sales I think you will see a dramatic drop in transactions, or more elaborate schemes by individuals to circumvent the taxes and duties. Neither of these will accomplish the GOB objective of more revenue. Most of us still prefer to play by the rules, but if you make the rules too difficult we will play somewhere else.
#185281 - 12/13/0509:15 AMRe: GST on property sales?
The real estate people I've talked with in Belize all seem concerned -- from somewhat to very -- about the new GST. Those who have studied it seem the most concerned.
In theory, on applicable properties, the 10% tax will be paid by the SELLER, not the buyer as with the stamp duty.
But of course in the end all fees and taxes are in effect paid by the buyer, as the costs tend to get built in to the selling price.
The GST bill as currently written is long (almost 70 pages) and complex. I've not studied it carefully, but it looks to me as if one possible issue is to exactly what real property it applies. It seems to me the definitions of applicable property are a little fuzzy.
The GST doesn't go into effect until April, and the bill may undergo some changes.
Real estate people and developers trying to market and sell new homes and projects are going to have a hard time explaining the latest added tax. There are lots of people with the funds to invest in Belize and boost it's economy, however, as tincup stated,"the "rules" are constantly changing". Foreign investors must have faith in the government and a certain "comfort level" before they will part with their money. The Belize government is testing that faith and pressing the "comfort level" to an uncomfortable position. I certainly hope the reality becomes clear that imposing frequent and dramatic tax increases such as this one will have a very damaging long term effect. Only time will tell.