Understanding Property Tax in the BVI
The Property Guide recently stumbled upon very helpful information, courtesy of the Inland Revenue Department (IRD), that we think will be beneficial to all property owners. If you have just moved to the British Virgin Islands, bought your first home, recently acquired land or are now, in some other form or fashion, the proud owner of real estate in the BVI, it’s important that you know what taxes you should be paying on that property. Failure to pay the mandatory property tax can result in steep fines as well as prohibition from the development of property.
The administering and collection of all property tax in the Territory is guided by the Virgin Islands Property Tax Act. It is basically an annual tax for both house and land that should be paid on all properties and lands in the BVI. The tax was formerly the Land and House Ordinance Tax, but along with its regulations, the legislation was revised. Since June 7, 2006, real estate owners in the BVI have been paying one property tax.
The only major difference in the new property tax is the due date for payment. Whereas in the past there were separate dates for house and land tax, there is now only one annual date to pay the tax: September 1.
Tax is payable on all portions of land. It is paid on lands, plantations, estates or other property whether cultivated or not. A house is defined as any dwelling house and any outhouse or other building used in connection with a dwelling house. It can also be a shop, store, shed or any kind of building or tenement, affixed to the soil or not. Whether the house is occupied or not is also irrelevant.
There are a few types of properties that are not charged property tax. Property owned by Her Majesty’s Government, also referred to as Crown Land, is not taxed if used exclusively for public purpose. Public institutions maintained by Government funds, such as hospitals, are not taxed. Other properties include community centres, burial grounds and cemeteries, schools that are guided by the Territory’s education act, and also property used for religious practices.
If you are still wondering if you should be paying property tax, note that the law states that every person deemed the owner of any land or house or both by way of purchase, lease, gift, devise, bequest, intestacy or by any other means is required to pay property tax. If a person leases land from Government for more than one year, that person is responsible for paying property tax.
Land is taxed according to the class of ownership of the property. There are three categories of proprietorship: British Virgin Islander, British Virgin Islands Company and Expatriate ownership.
The owners are defined as follows:
British Virgin Islander:
•A person who is deemed to belong to the Virgin Islands under the Immigration and Passport Ordinance (1969).
•A British Virgin Islands company or settlement.
•A person who has owned land in the BVI for a continuous period of not less than 20 years immediately prior to the commencement of the Land and House Tax ordinance.
British Virgin Islands Company:
•All company’s directors are BVIslanders
•At least 2/3 of the votes exercisable or would be exercisable at any meeting of the company are beneficially vested in persons who are BVIslanders
•For a company having a share capital, at least 2/3 of the shares are beneficially vested in persons who are BVIslanders.
•For a company not having a share capital, at least 2/3 of the members are BVIslanders.
Expatriates:
•Any person who is not a British Virgin Islander or a Non-British Virgin Islands Company.
The rate by which land is taxed is also governed by these categories. Land owned by a BVIslander of BVI Company, on the first acre or part of an acre is charged $10. On each or part of an acre after that first acre, the charge is an additional $3. Half an acre or less is first $5. Land greater than one acre but not in excess of one acre is charged $150. Each additional acre or part is charged $50 thereafter.
House tax is charged at the rate of 1.5% on the national annual income value of the dwelling. The national annual income is the expected, reasonable annual earnings of the property, not in excess of the property’s rental value. Factors and considerations taken when fixing the national annual income value or assessed value of any house include the type and purpose of the property. The size of the property, location, current prices, value of neighbouring property as well as possible inflation are all factors that influence any property’s national annual income value. This assessment is done by the IRD.
The list of particulars about the property to be assessed is prepared two months prior to the collection of taxes by the IRD and may be viewed at such public locations as the IRD office in the Administration Complex on Tortola and Virgin Gorda and post offices. Property owners may object to the assessment of their property in Magistrate’s court. If an owner is not in agreement with the Magistrate’s findings, owners may make an appeal to the court of appeals.
All property owners are advised that failure to pay their property tax by December 1 will result in an additional charge of 20% of the annul tax for each unpaid year. For people interested in acquiring more property, it is of particular interest that taxes are paid on time and annually. In 2002, Government made an amendment to the Stamp Act which states: “No deed, document or writing which purport to transfer freehold or lease-hold property, or to create any mortgage, charge, lien or other encumbrance thereon and are required to be stamped with stamp duty shall be stamped unless all property taxes have been paid in respect of the property to which the deed, document or writing relates.”
Property tax payers are given a 90-day grace period for paying taxes. All taxes are payable on September 1. Payments can be made between this date and November 30 with the property owner incurring no fines. If taxes are not paid by December 31 annually, the Commissioner of Inland Revenue can sue people through the Magistrate’s court for property tax arrears.
To ensure you are in good standing with the law, payments can be made at the following locations:
Tortola: Central Administration Complex
Virgin Gorda: Vanterpool Administration Complex
Jost Van Dyke/Anegada: District offices on those islands
Make sure you are always in good standing with any tax. Failure to pay may result in an untimely suit or prohibition from further property development or acquisition. So even if you are new to the island, or a new property owner, ensure you do the right thing and keep enjoying your piece of nature’s secret.
