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The Harneys Series: Property Tax - The Succinct Guide
WORDS BY PAUL MELLOR, SENIOR ASSOCIATE – HARNEYS
WHILE PROPERTY TAX in the British Virgin Islands is relatively low, it does take a little effort to ascertain what is due because no Invoices or reminders are issued and property owners must remember to pay the required tax when it becomes due.
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Property owners benefitted from an extended grace period to pay property tax for 2017 on account of the recent hurricanes, but that period has come to an end and property tax payments for 2018 will be due shortly.
There has been some discussion on social media as to whether property tax for 2018 will be postponed or waived on account of the continuing recovery effort, but there has been no official notification to this effect.
Property tax due on September 1, 2018 therefore covers the period January 1, 2018 to December 31, 2018.
While property tax falls due annually on the first of September, property owners are allowed a grace period of three months to pay, meaning that a property owner will not be in arrears as long as the property tax attributable to his or her property is paid on or prior to November 30 annually.
Property tax comprises two elements, as follows:
• A tax levied on every acre or part of an acre of land in the BVI (sometimes referred to as land tax); and
• A tax levied on the assessed value of every house in the BVI (sometimes referred to as house tax)
The element of property tax attributable to land is calculated at differing rates, depending on whether the land in question is owned by a British Virgin Islander, or an expatriate.
For these purposes and broadly speaking, a British Virgin Islander is a person who is deemed to belong to the BVI under the Immigration and Passport Act and also a BVI company that is owned and controlled by British Virgin Islanders.
An expatriate is either a person who is not a British Virgin Islander or a Company that is not owned and controlled by British Virgin Islanders.
The property tax attributable to land is chargeable at the following rates:
• Where the land in question is owned by a British Virgin Islander: - US$10 on the first acre or part acre; - US$3 on each additional acre or part acre
• Where the land in question is owned by an expatriate: - US$50 on half an acre or less; - US$150 on more than half an acre but not exceeding one acre; and - US$50 on each additional acre or part of an acre exceeding one acre
Where a person holds land under a lease from the Crown with a term exceeding one year, the land is taxed at the rate applicable to a British Virgin Islander, whether the lessee is a British Virgin Islander or an expatriate.
The element of property tax attributable to houses is calculated at the rate of one and a half percent per annum on the notional annual value of the house in question, being an amount, not in excess of the rent, which the property might reasonably be expected to yield from year to year.
The assessment list is required to be published in each inhabited island and in such parts of each inhabited island as the Minister responsible for finance deems expedient.
The assessment list is to be accompanied by a notice advising the owners of the properties referred to in it, that they may appear before a hearing of the Magistrate at the date and place referred to in the notice if they wish to object to the assessed value of their property as detailed in the assessment list.
The assessment list for 2017 is available on the BVI Government website and the assessment list for 2018 was scheduled to be published in mid-July.
Property owners who do not agree with the contents of the assessment list as it relates to their property may appear before the Magistrate on the dates and at the times of the hearings stated in the assessment list and state their objections.
At the hearing, the Magistrate will enquire into the assessment, hear and determine the objection and confirm, and alter, or amend the assessment list as is necessary.
Failure to pay property tax by November 30 in the year in which it falls due automatically leads to interest accruing at a rate of 20 per cent per annum on the amount payable.
Property owners are therefore encouraged to set an electronic reminder to check the assessment list and to pay the property tax attributable to their property on time to avoid the imposition of avoidable interest.
About Harneys' Private Client Team
Harneys Private Client team regularly advises clients on the acquisition of BVI real estate, including devising ownership structures to satisfy the tax, regulatory, succession planning, and other needs of each client.
For more information on these solutions or any other matters relating to acquiring property or a yacht, registering a business, or planning for future generations, please contact Sheila George, Johann Henry, or Paul Mellor.
