Last week the Government of Jamaica announced a slew of tax cuts which are expected to provide a major boost to the Jamaica real estate market.
During the 2019-2020 Budget Debate, Finance Minister Dr Nigel Clarke revealed a stimulus package which is set to take effect from 1st April 2019.
The tax cuts, which include a reduction in taxes on property transactions, have been designed to stimulate business and economic activity including the real estate sector.
New Measures Include a Reduction in Transfer Tax and Stamp Duty
At present, property sellers are required to pay 5% transfer tax and 2% stamp duty, while buyers are required to pay 2% stamp duty.
Under the new measures, transfer tax will be cut by more than half. From 1st April, sellers will pay just 2% transfer tax.
Stamp duty will also be cut. From next month, stamp duty will be reduced to a flat fee of JMD $5,000 (approximately USD $80) split equally between buyer and seller – JMD $2,500 for sellers and JMD $2,500 for buyers.
Tax Cuts Expected to Boost Sales of Real Estate in Jamaica
Last year there was a 1.9% decline in the total number of real estate transactions in Jamaica from 9,847 in 2017 to 9,656 in 2018, according to an analysis of National Land Agency data.
By reducing the costs of buying and selling real estate, these new measures are expected to stimulate the market and contribute to an increase in the number, frequency and value of property sales.
“This will allow for greater mobility of assets, which is consistent with our drive for economic growth,” commented Dr Clarke.