Real Property Taxes – Purpose & Consequences of Non-Payment

 

Real property tax is a tax on the value of the real property a person owns such as land, buildings, and anything else built on or permanently fixed on it. This includes houses, industrial buildings, garages, and the ground beneath them. If you are financing your property, it is common for the payments to be split into installments, where the funds are held in an escrow account until the tax is due. You have the option to pay your tax directly to your local tax office where they will provide you with payment information and instructions. 

The purpose of paying property taxes is to ensure that the local government has funds to pay for local projects and services that will benefit the community such as water and sewer services, law enforcement protection, education, road construction, etc. 

Property taxes are ad valorem tax, meaning they are based on the value of the property. These taxes are calculated and collected by local governments in which the property is situated. Local Municipalities employ property assessors to determine the tax value of every property within the assigned districts. Once the assessor determines the value, they would then deduct any tax exemptions you qualify for. This may be available for older residents, renovations, surviving spouses, volunteers, charitable organizations, etc. 

Property taxes tend to rise over time, taking into consideration the increased value of the property and other underlying factors that contribute to the property. However, there are ways to lower your property tax bill. If you think the tax assessment done on your property is too high, request a copy of the assessment from your local district office. The records will determine detailed information on your property, and if there is anything that looks inaccurate, you can make an inquiry with the original tax assessor. 

Another way to reduce your tax bill is by postponing major renovations to your property. Try holding off on improvements that can trigger higher tax bills at least for a year or two until the next scheduled tax assessment. 

The bottom line is that if you own real property, you will owe property taxes. It is an expense that you just cannot avoid. You have every right to enquire about the bill amount that you pay and to make sure a thorough and true assessment is done specifically for your own property.  

For more about property tax rates in the Bahamas see:

https://inlandrevenue.finance.gov.bs/real-property-tax/faqs-rpt/