Special tax relief for Abaco and Grand Bahama

Introduction
Real property tax
Sale of real property

Introduction

To encourage the rebuilding effort in Abaco, Grand Bahama and the surrounding Cays (the zone) after Hurricane Dorian, tax relief is now available under the Disaster Reconstruction Authority (Special Economic Recovery Zone) (Relief) Order 2019.

This article examines the tax relief available with regard to real property.

Real property tax

Any improved property within the zone that was either partially or completely destroyed as a result of the hurricane will be exempt from real property tax in 2020 if the property is rebuilt or otherwise habitable by 1 October 2020.

If the property is not rebuilt or otherwise habitable by such date, there will be no tax break and the taxes owing in 2020 will be added to the tax bill in 2021.

The Department of Inland Revenue has yet to confirm what evidence will be required to show that a property has been rebuilt or is habitable, but these requirements are expected to be clarified in due course.

Sale of real property

From 4 December 2019 to 30 June 2020, purchasers of real property will be eligible to receive a discount on value added tax (VAT) on the conveyance at the rates listed below if they can demonstrate that:

• the property is fully habitable;
• if the property is not fully habitable, they have plans to make repairs and can start these within 75 days of the closing; or
• if the property is undeveloped, they have plans showing that they intend to undertake material commercial or residential development of the property.

If the repairs or construction are not commenced within 75 days of the closing of the sale, the tax becomes payable.

For further information on this topic please contact Chelon Carr-Newbold at Lennox Paton by telephone (+1 242 502 5000) or email (ccarr-newbold@lennoxpaton.com). The Lennox Paton website can be accessed at www.lennoxpaton.com.