The highly anticipated reading of the budget by our minister Mr. Audley Shaw was the highlight of this week. With promise of increase in taxes, the country was on edge as we all pondered how much more will they demand of us. With a buzz of road blocks and threats of possible demonstrations, with only 2 hours to go before all was revealed, many Jamaicans were glued to the airwaves! Whilst we were not happy to know we will now pay tax on petrol and items like oates, it is clearly a general concensus that this was a necessary act to sustain the country. This is evident in the fact that there were no significant outbreak of violence, which is usually the norm when Jamaicans are not satisfied with the decisions made by the governing politicians of our country.
On a high note, the Real Estate industry has once again received well needed stimulation by the decrease in Transfer Tax from 5% to 4% and Stamp Duty from 5% to 3%. Even though this change will not take effect until January 2010, it does however mean prospective buyers can start looking actively for that ideal property as this now means that only a deposit of 10% as oppose to the popular practice of having to pay out 15% deposit of the selling price, will now be readily accepted.
True, this decrease in taxes does not address the core problem within the industry, with 80% of NHT contributors not qualifying for the current $3.5 million being offered to qualified first-time home owners, and the high interest rates being charged by the various lending agencies. On an interesting note, RBTT has decided to enter the industry by providing residential mortgages alongside its’ rivals Jamaica National Building Society and Victoria Mutual Building Society. Being new to the industry, we can only assume that a very competitive interest rate, possibly lower than what is currently being offered by the competition, can be expected, if RBTT plans to successfully capture any kind of market share. Of course, I am equally fascinated with how the competion will respond, either way, it’s a win win for the Real Estate industry all together!
