An error in calculating land tax bills has affected 25 807 residential properties valued at over $450 000, Minister of Finance Ryan Straughn announced on Monday.
He explained that the affected bills did not fully reflect the updated residential tax bands after the tax-free threshold for residential property was raised from $300 000 to $400 000.
“25 807 residential properties were impacted by the overcalculation, and therefore those persons now will be the beneficiaries of paying a little less tax this year, and they were given the opportunity to be able to determine what they do.”
Speaking at a press conference at the Barbados Revenue Authority’s office on Roebuck Street, Straughn outlined the corrected tax bands.
“The correct residential land tax bands, for the avoidance of doubt, are zero per cent on the improved value up to $400 000. 0.1 per cent on the portion above $400 000 and up to $550 000. 0.7 per cent on the portion above $550 000 and up to $950 000, and 1 per cent on the portion above $950 000.”
The minister clarified that bills for more than 62 000 residential properties valued between $400 000 and $450 000 were calculated correctly and will not be reissued, while updated bills will be issued for affected properties valued above $450 000.
Straughn acknowledged the inconvenience and explained that the error occurred because the tax bands were not automatically adjusted when the threshold was increased.
“So, in the movement of the threshold from $300 000 to $400 000, the bands were not adjusted automatically as they should have been,” he said.
He explained that when the tax-free threshold was $300 000, the first taxable band ran from $300 001 to $450 000, with a rate of 0.1 per cent. When the threshold increased to $400 000, the remaining bands did not shift accordingly.
“So it meant that properties … above $400 000 only got the benefit of $50 000 for the 0.1 per cent to be applied, as opposed to the $150 000. So it meant that the 0.7 [per cent] started earlier than it should have been,” Straughn said.
He said the error had been recognised and was being corrected as quickly as possible.
Straughn gave the assurance that measures are being put in place to prevent a recurrence, with the tax bands to be programmed to adjust automatically when the threshold changes.
“So going forward, obviously we continue to review where we are with respect to property taxes,” he said. “The reality is that the bands really should have been programmed automatically to be able to move up, and therefore, any increase in threshold in the future will have that automatic increase in there, such that the calculations with respect to land tax bills will happen as seamlessly as possible.”
The minister noted that land tax is normally due by March 31 each year.
He said the updated bills are expected to be distributed with an issue date of August 31, with payment deadlines extended to give affected property owners more time.
The new deadlines are September 30, 2026, for in-person payments to receive the 10 per cent discount; October 30, 2026, for in-person payments to receive the five per cent discount; and December 1, 2026, for online payments, including transfers, to receive the 10 per cent discount.
The correction applies only to residential properties and does not affect non-residential properties.
From September 1, residential property owners who have already paid a bill for a property valued above $450 000 can request a refund of the net overpayment, have the amount credited towards their 2027 land tax bill or have it applied to any outstanding arrears.
Straughn revealed that BRA had already received $35.9 million in payments from affected taxpayers.
“So far we have received $35.9 million already, and therefore, when persons go onto the portal and determine whether they want a refund or whether they want the matter applied as a credit at the end of September, we’ll be able to tell you exactly who requested the refunds, and who requested the credits to be applied to their properties,” he said.
He clarified that the $35.9 million was not the amount to be refunded, as the eventual figure would depend on whether affected taxpayers opted for refunds or credits.
Straughn said the corrected bills were being printed and the Post Office was expected to begin processing them before the end of August.
BRA Director of Tax Audit and Compliance Trevor Forde encouraged taxpayers to register online with the Authority.
He said taxpayers can use the bill number and map reference number from a previous land tax bill to access their updated bill online, allowing them to see the changes without waiting for the bills to arrive by post.
Forde also encouraged taxpayers to pay online to take advantage of the 10 per cent discount.
(LG)
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