KÚYA Magazine – July 2019

KÚYA 88 WWW.CBJAMAICA.COM

3. Effective April 1, 2019, where a person dies owning real estate,
   shares, debentures and/or bonds, no Transfer Tax on death, commonly
   called death duties, will be charged on the first Ten Million Dollars
   ($10,000,000) in the value of those assets. Any value above Ten Million
   Dollars ($10,000,000) is taxable at one point five per centum (1.5%).

The portion of the value of the estate not subject to Transfer Tax is

therefore increased by Nine Million Nine Hundred Thousand Dollars

($9,900,000), up from One Hundred Thousand Dollars ($100,000).

Importantly, so long as the tax has not already been paid to the Stamp

Commissioner, in full or in part, the estates of all deceased persons will

benefit from this change, whether they died before or after April 1, 2019.

4. Effective April 1, 2019, The National Housing Trust’s loan limit
   moved from Five Million Five Hundred Thousand Dollars ($5,500,000)
   to Six Million Five Hundred Thousand Dollars ($6,500,000) and the
   interest rate on loans made to borrowers has been reduced by one
   per centum (1%) across all income brackets.

What Does All This Mean?

Let's assume that the vendor and purchaser have agreed a purchase

price of Twenty Million Dollars ($20,000,000) for the sale and purchase

of a parcel of real estate. The potential savings are illustrated in the

two tables below:

The Vendor’s Savings

vendor’s vendor’s savings

costs costs

before after

Transfer Tax $1,000,000 $400,000 $600,000

Stamp Duty (one-half ) $400,000 $2,500 $397,500

Registration Fee (one-half ) $50,000 $50,000 nil

Total Savings for Vendor $997,500

The Purchaser’s Savings

purchaser’s purchaser’s savings

costs costs

before after

Transfer Tax not applicable not applicable not applicable

Stamp Duty (one-half ) $400,000 $2,500 $397,500

Registration Fee (one-half $50,000 $50,000 nil

Total Savings for Purchaser $397,500

Let us now assume that on the purchase of real estate for Twenty

Million Dollars ($20,000,000), the purchaser is able to secure Ninety-

Five per centum (95%) financing from a lending institution. The

purchaser’s/borrower’s savings on the mortgage loan is set out in the

table below:

The Borrower’s Savings

borrower’s borrower’s savings

costs costs

before after

Stamp Duty $118,750 $6,250 $112,500

(excluding power of attorney)

Registration Fee $47,500 $47,500 nil

Total Savings for Borrower $112,500

Finally, let's assume that at the time of death, a person owns real estate,

which is subject to Transfer Tax (and benefits from no exemption),

which is valued at Twenty Million Dollars ($20,000,000). The savings

are illustrated in the table below:

The Estate’s Savings

estate’s estate’s transfer

costs costs tax

before after

Transfer tax on death $298,500 $150,000 $148,500

Stamp Duty on the Grant $10,000 $10,000 nil

Total Savings for the Estate $148,500

In conclusion, it should be noted that successive governments have

made significant strides in the reduction of the cost of purchasing

real estate, selling real estate and the administration of estates, but

having said that, it is hoped that the combination of changes recently

announced, will result in investment and the increased mobility of real

estate, which is a precious and limited commodity. It is also hoped

that the changes will enable more people to become homeowners

and, if times get tough, to put homeowners be in a better position

to more affordably tap into the equity in their homes at the moment

they may need it the most. ∆

Disclaimer: This publication is not intended to provide legal advice

as individual situations will differ and should be discussed with your

attorney-at-law.