Minister of Finance and Planning Audley Shaw yesterday announced adjustments to the property tax regime that will see a four per cent reduction in the rate applied to the higher valuation bands.

Most local property owners will now see increases below 60 per cent in their property tax bill.

However, the Finance Minister outlined that 6,848 properties representing 0.9 per cent of the total taxable properties with values of more than $20 million will still see tax increases on average ranging from 201 per cent to 604 percent.

Most of these are commercial (which includes hotels), industrial, agricultural or sub-divisions. 2,062 are residential properties.

Announcing the adjusted rates, Shaw said the government has retained the flat $1000 tax on all properties valued up to $400,000.

Above this flat rate, there will be eight bands ranging from a low of 0.5 per cent to a high of 0.9 per cent — a reduction from the tax rates announced recently that ranged from 0.8 per cent to a high of 1.3 per cent of the land value.

The Minister stated that, under the adjusted regime, 448,360 or 58 per cent of the 776,487 properties will now see a reduction or no change in their property tax bills over what was assessed for the last fiscal year.

The average increase in taxes for residential properties will now be 10 per cent compared with taxes last year, down from the 60 per cent average increase announced at the time of the budget.

For commercial properties the average increase will be 58 per cent compared with taxes announced at the time of the budget.

For agricultural properties, the average increase is now 40 per cent compared with taxes last year, a significant drop from the 93 per cent average increase.

Minister Shaw indicated that a bill already tabled aims to introduce annual valuations based on an index linked to the CPI (consumer price index).

The 2013 valuation, on which the new property tax regime is based, saw an increase in the unimproved land in Jamaica to approximately $1.9 trillion dollars or 235 per cent compared with value of $567 billion in 2002.

The Bill, tabled in January 2017 to amend the Land Valuation Act, will allow for annual increases in land valuations based on an index such as the annual consumer price index in the intervening years between full land valuations, Shaw outlined.

“This will reduce significantly the risk of new land valuations resulting in very high changes in values in any one year,” he said.