Insurance duty change is property tax, says Miller
(CNS): The independent member for North Side has accused government of introducing a property tax via the back door with changes to the stamp duty law, which introduces a 2% rate on insurance policies rather than the previous flat rate fee of $12. One of a number of tax increases introduced by government in the 2012/13 budget in order to meet the strict spending parameters set out by the FCO government, the amendment is expected to be brought to the Legislative Assembly at next month’s meeting. As well as increasing stamp duty, the amendment provides for duty on property insurance.
Ezzard Miller said that this equates to an annual property tax as it is based on the value of the insurance policy, which is in turn based on the value of people’s homes. The switch means a massive increase, not just for the wealthy but all homeowners, even those owning modest homes. He said the jump from the annual flat fee of $12 to a 2% rate was not just a massive hike but a tax on property ownership. The independent member said most homeowners will not have a choice in the matter as most have a mortgage and must have property insurance.
“In the current economic climate this is going to affect many ordinary people,” he said. “This is nothing more than a property tax via the back door.”
Miller said he hoped to see people showing their objection to the tax on insurance policies because the man in the street was being crippled by the fees and taxes imposed by the current government due to its failure to address public spending while giving away duty waivers to businesses.
As result, when the amendment comes before the LA he would not support the bill , he said, but noted that his one vote would do little to alter government’s mind; that would take greater support from the community, he said, and pointed to the success of the Cayman United Group in its opposition to the propose ex-pat tax, which was dropped because of the public outcry. “I would like to see the same kind of opposition to this tax from the local activists,” he said.
The new law will also see stamp duty increased from 4% for Caymanians and 6% for non-Caymanians to 7.5% (the current rate for Seven Mile Beach) regardless of the location. However, the threshold before duty is payable for locals has been increased to properties of $300,000 and over and Caymanians will still only pay 2% on those up to $400,000.
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