Owning property in Jamaica is getting easier and cheaper
The reduction of real estate taxes and the speeding up of the property development approval process is expected to bring employment opportunities to nearly half-a-million unemployed Jamaicans, which will in turn boost the government's payroll and consumption tax intake.
The campaign promises to abolish the 7.5 per cent transfer tax, as well as to gradually reduce stamp duty on real estate transactions will be upheld, according to newly-appointed Minister of Finance, Audley Shaw.
Additionally, the government will deem approved all subdivision and building applications not processed in three month's time.
"Can you imagine what will happen to the real estate sector when these changes come through? It will take off like a rocket." said Shaw. "The innovations we propose will be a shot in the arm for the construction industry."
Players in the real estate sector favoured the news.
"The abolition of transfer tax and a reduction in stamp duty will go far in our view, towards stimulating the sector, and making Jamaica a more attractive proposition for investors at home and abroad," said the Real Estate Reform Consortium Limited (RERCL) in a press statement. "We have given our commitment to work with the minister on this issue, as well as the other vexed issue of the bureaucracy in our system."
"We are very serious about it and serve notice that the government has zero-tolerance to bureaucrats who hold up the building approval process," Shaw added. "If a government agency does not respond to an application within three months, the application will be deemed approved."
The minister contended, however, that the aim of the government was ultimately to lower the cost of housing and improve the local housing stock rather than compromise the environment.
Shaw told the real estate professionals that as one of the major areas of economic growth, the real estate sector will get his full attention.
According to the Planning Institute of Jamaica (PIOJ), between April and June 2007, the construction and installation sector increased by 3.6 per cent as a result of increased activities in the non-residential component facilitated by higher capital expenditure.
The PIOJ had originally predicted that real goods and services produced by the country - the gross domestic product (GDP) would grow by 2.1 per cent in the third quarter of 2007. This growth would be a result of a 2.6 per cent growth in the Goods-Producing sector and a 1.8 per cent growth in the Services sector. Based on the passage of Hurricane Dean and the current cement shortage crisis, economists suggest that there will be a slight pull back in the construction sector.