USVI Governor submits legislation to take back local control of real estate taxes
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| Published on Monday, November 12, 2007 |
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ST THOMAS, USVI: Governor John deJongh Jr. submitted legislation to the Senate on Friday that represents a significant step by the USVI Government to manage its real property tax regime again.
The Governor said, “By taking back local control of real property taxes and modernizing the system, we will be able to raise the funds necessary to run our government more fairly, evenly and predictably. All who have worked to craft this proposal seek a day when we can better manage and mitigate the current tumultuous nature of property tax assessment.”
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USVI Governor John
deJongh, Jr. Photo:
Susan Mann |
DeJongh wrote in his letter to Senate President Usie R. Richards that, since 1936, the US Virgin Islands has utilized a single mill rate of .0075 percent.
The proposal separates real property in the US Virgin Islands into four classes, and a separate mill rate would be imposed for each class of property.
The four classes are:
1) unimproved non-commercial real property taxed at a mill rate of .00495;
2) residential real property taxed at a mill rate of .00377;
3) commercial real property taxed at a mill rate of .00711; and,
4) timeshares taxed at a mill rate of .01407.
“This system of multiple rates, which is used in many jurisdictions throughout the United States, results in smaller residential real property tax increases, thereby protecting the interests of Virgin Islands homeowners.”
The rates contained in the proposed tax legislation will allow the government to increase the available exemptions for homeowners, put in place circuit breakers to address and mitigate instances of extremely high increases in real property taxes for homesteads, while still meeting the goal of raising the revenues set forth in the Fiscal Year 2008 Budget.
Under the proposal, the Tax Assessor is mandated to utilize an internationally recognized system of appraisal. The Tax Assessor would apply the standards of the International Association of Assessing Officers (“IAAO”).
This provides an identifiable measuring stick against which the appraisals of the Tax Assessor may be compared. The addition of this criterion will help to avoid the uncertainty that led to the filing of the Berne case and related litigation.
DeJongh also explained to the Senate that the categories of exemption from real property taxation remain unchanged.
“However, the homestead exemptions in this proposal are in the form of tax credits and have been increased across the board in all categories. The base homestead exemption which is currently $250 is raised to $400 in the proposed legislation. The Veterans exemption is increased from $312.50 to $450, and the exemption for those with qualifying disabilities is increased from $250 to $400 under my proposal. Lastly, the existing senior exemption, which presently is $250, and the elderly exemption, which is now $375, is now set forth in one exemption of $500.”
The proposed measure amends the authority of the Board of Tax Review to hire multiple hearing officers to allow that body to more effectively handle new appeals and reduce the backlog of pending real property tax challenges. This bill also provides funding for this purpose as well as to cover the cost of stenographers to transcribe the tax appeal proceedings.
“The bill contains provisions which authorize the Tax Assessor to issue the real property tax bills for the years 2006 and 2007 in fiscal year 2008. As discussed, during the budget process, these revenues are absolutely required in order to sustain the FY 2008 Budget passed by the Legislature which was approved,” deJongh said. To decrease the financial burden on taxpayers, the governor also included the provision by which taxpayers will be able to pay their 2007 real property tax bills in installments without penalty if all prior real property tax bills for their property have been satisfied in full. deJongh described the proposed legislation as the result of a lengthy and demanding process. “It is my belief that the proposed measure strikes a fair balance of the interest of all stakeholders in the Virgin Islands real property tax system.” | | | | Reads : 418 | | | |
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