Dear Editor,

The Government has rightly expressed a concern about the inadequacy of the number of houses coming on the market and available to those wishing to purchase a home for the first time.It is accepted that squatting and informal settlements are widespread throughout Jamaica and there is a view that the main reason for this is that the vast majority of our citizens are unable to purchased a home.The purchase of a home is, for just about everyone, the largest investment undertaken. It is a life-changing decision, as several of us either live the rest of our lives in the house we have purchased or we live a significant part of our lives in the first home we purchasers before moving elsewhere.Historically, lands in Jamaica were distributed primarily to our colonial masters, that is to say, primarily white, British citizens. The descendants of our colonial masters have continued to be the owners of the best lands in the country. On the other hand, the vast majority of us who are descendants of slaves continue to exist on hillsides and on poor rocky lands to which our foreparents fled after the abolition of slavery.Efforts have been made in the past to address the unavailability of lands to the vast majority of Jamaicans. However, none of these efforts was sufficient to ensure that lands were made available in an equitable way to all citizens.If the Government is serious about ensuring that all Jamaicans, especially young people, can gain access to lands then they will have to first address the issue of availability of land. To acquire a home in Jamaica constitutes an expensive and challenging endeavour. Apart from the price of the land, the Government imposes a multiplicity of taxes, charges and duties on the process of acquiring land and of building a house. Where a plot of land is being transferred by sale the Government imposes a transfer tax of five per cent of the value and stamp duty of four per cent of the value. Then when the title is to be registered there is a fee of 0.5 per cent of the value of the land.The purchaser is advised to have it surveyed so that the boundaries are in order and the surveyor’s fee is generally 0.3 per cent of the value or a minimum charge of $15,000. General Consumption Tax (GCT) is charged on this fee, again payable to the Government. The attorney representing each party charges an average fee of three per cent of the value of the property and GCT is applicable on this service fee; and this GCT is paid to the Government, of course.Having gone through the gauntlet or purchasing the land, the new owner has now to commence the construction of the house. But first, the cost of producing the plan could be in the range of $60,000 plus GCT, payable to the Government. The plan is then submitted to the municipal authority and at that stage a fee of some $127 per square metre is payable for the application fee. In addition to this, the corporation will charge an inspection fee of $1,600 and a further $3,000 for inspecting the arrangements for storm water on the premises.Now all these payments are made and Government has eaten well from this transaction, even before a single block has been laid. The construction of the house will see the new owner paying GCT on all the building materials and the services engaged for the construction will also attract GCT.From this we can see that the Government is a significant beneficiary from construction activities. Also these sums being collected by the Government, if removed, would significantly reduce the cost of a new house.If the Government is serious about assisting with increasing the stock of houses then they should revisit the various costs that are involved in acquiring a home and see how they could reduce or remove the taxes, the stamp duty, and the fees charged.In addition, the Government should widen access to the funds of the National Housing Trust (NHT) while bringing stricter regulations to the way developers price and sell houses that are partly or fully financed by the NHT. 

Linton P Gordon

Ocho Rios, St Ann

lpgordon@cwjamaica.com