Emailed in by Michael Hawes (who had a good reader's letter in The Independent this week), from The Jamaica Gleaner:
USING UNIMPROVED RATES
In the meantime, the Government appears set to continue with the system of charging property tax on the unimproved value* of properties.
Eric Allen, commissioner of land valuation, said moving to a system of charging property taxes on the improved value would use up a lot of time and resources. He said property tax was currently charged based on location.
Phillips said while applying property taxes based on the improved value would be more effective in getting the wealthier to pay more, it would require the authorities to examine "every single parcel, and you have to arrive at a valuation of building and other accoutrement and other improvements that have been made".
The minister said the reasoning behind applying taxation on the unimproved value of properties is that it would provide an incentive for persons to do improvements to their properties. He further said that policymakers of the day felt that applying the tax on the improved value could send the signal to persons that they are being penalised for making improvements to their properties.
* 'Unimproved value' is a bit of a misnomer actually, what they mean is the 'site premium' or 'location value', i.e. the extra rental value of a building on favourable Site X compared to the rental value of a similar building on marginal Site Y, where the rental income is just sufficient to cover the bricks and mortar cost but generates no surplus above and beyond that.
