It is now well-known that property tax has been reintroduced into the tax landscape in Trinidad and Tobago and is payable by owners of real property. The governing legislation are the Property Tax Act, Chap. 76:04, the Valuations of Land Act, Chap. 58:03 (“the VLA”), and the Finance Act, 2023, Act No. 15 of 2023. Currently, the Property Tax (Amendment) Bill, 2024 is before Parliament and seeks to amend the Property Tax Act, by, inter alia, reducing the rate of tax payable by owners of residential property.

Most owners of residential property would have already complied with the requirement under Section 29 of the VLA to submit a return to the Commissioner of Valuations and most would have received a PIN and Notice of Valuation under the VLA. 

The Notice of Valuation contains the annual rental value of the property which is used in calculating property tax attributable to the property in question. The Notice of Assessment sets out the amount of tax that is actually payable based on the annual rental value of the property. 

The Board of Inland Revenue (BIR) has begun issuing to property owners (who have not lodged an objection to the Notice of Valuation) a Notice of Assessment stating the annual property tax payable in respect of their property. This tax is to be paid by September 30, 2024 of the current year.  Some property owners who have received a Notice of Assessment have already paid property tax for this year. The Minister of Finance has confirmed that, as at March 13, 2024, 801 payments of property tax have been made to the BIR.

However,in instances where the Notice of Valuation and/or the Notice of Assessment have not yet been issued by the BIR, vendors and purchasers may be in limbo as to how to treat with the payment of property tax when conducting land transactions.

Persons who are in the process of selling residential property may be required, at a minimum, to provide purchasers with the PIN and Notice of Valuation issued by the Valuations Division. Vendors who are not yet in possession of the above information should take steps to acquire these documents from the relevant Valuation Division office. More often than not, these items are included as deliverables by vendors in the agreement for sale for real property.

With respect to unpaid property tax, a purchaser may require an indemnity from his/her vendor in respect of that portion of property tax for which the vendor is responsible at the time of completion. This may be done in the agreement for sale or by way of a separate agreement.   

Alternatively, purchasers may instruct their attorneys-at-law or stakeholders to retain an agreed sum from the deposit or balance of the purchase price on account of property tax payable by the vendor.

Vendors may also be asked to pay a prorated sum or an advance towards property tax, pending issuance of the Notice of Assessment. Of course, any such sum would need to be agreed by the parties at the time of entering into the agreement for sale or prior to completion.

Ultimately, there is no fixed approach when it comes to the issue of unpaid property tax. The course adopted would need to be agreed by the parties to the transaction and stipulated in the agreement for sale or other ancillary document.

Steps to be taken by purchasers following completion of real property transactions

Purchasers (and vendors) of real property are required to submit a return of change of ownership with the Commissioner of Valuations within one month of completion of the transaction (pursuant to Section 28 of the VLA).

In order to do so, purchasers will need to attend at the relevant office of the Division of Valuations with the following supporting documents:

1. certified copy and an ordinary photocopy of the title deed/instrument;
2. two forms of valid picture identification (i.e., national identification card, passport or driver’s permit) as well as a photocopy of each;
3. PIN number for the property, if available; and
4. copy or original of the 2009 Land and Building Taxes receipt or current property tax receipt for the property, if available.

The Valuation Division will guide purchasers as to the necessary forms which are to be submitted in order to effect the change of ownership.

Purchasers should ensure that this step is completed so that the Valuation Roll kept by the Commissioner of Valuations may be updated to reflect the change of ownership. Note that it is an offence for owners of property to refuse to file returns as prescribed by the VLA. Property owners should therefore comply with this section to avoid being in breach of the law.