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The Government is further reducing the rates for Stamp Duty and Transfer Tax this fiscal year, mainly to stimulate a revival in the real estate and construction sectors.
Minister of Finance and the Public Service, Hon. Audley Shaw, told the House of Representatives on Tuesday(April 23), that Stamp Duty will be reduced from 4.5% to 3%, and Transfer Tax from 5% to 4%, effective January 1, 2010.
He said that the move would cost the Government $644 million in revenue, but was expected to stimulate a recovery in property sales and construction investments.
“We want to stimulate private sector investment in the construction industry and in development,” Mr. Shaw said, as he opened the 2009/2010 Budget Debate.
He noted that since 2008, Stamp Duty and Transfer tax have been reduced by almost 50%, including reductions recorded in the stimulus package announced by Prime Minister Bruce Golding late last year.
Since September, 2007, Mr. Shaw has assured realtors that the Government would eventually abolish both taxes to speed up the pace of business, on a phased basis.
The Matalon Tax Committee’s reports, in 2004, proposed elimination of Stamp Duty, excluding postage on mail, and reduction of Transfer Tax from 7.5% to 5%. Government collected $10.7 billion in Stamp Duty in 2007/2008.
Documents are stamped to make them legal and binding. Unstamped or insufficiently stamped documents are not admissible in a court of law, except in criminal cases. Transfer Tax is assessed and paid by persons transferring real properties, including land and/or transferring property on death.
Among documents requiring stamping are- Bills of Sale, Deed Poll, Discharge of Mortgage, Hire Purchase Agreements, insurance policies, applications to register land, land leases, loan agreements, mortgages, sale agreements and instruments for the transfer of property.