What exactly is the BRA tax and how do I ensure it does not hold up the sale of my home
Lisa Coyle, Real Estate Agent
The only thing that is constant in life is change and the Real Estate industry is not foreign to this concept.
One recent change was implemented in March 2017 when the government passed legislation in the form of the Barbados Revenue Authority (Amendment) Act 2017 (the “Act”). By the provisions of the said Amendment all persons, natural and juridical, who wish to convey property must first obtain a tax clearance certificate from the Barbados Revenue Authority (BRA) as evidence that all taxes payable under the Excise Tax Act, the Income Tax Act, the Land Tax Act and the VAT Act have been fully paid or that an agreement has been entered into with the BRA pursuant to which a sum representing 10% of the tax assessed as payable by that person is paid and installment arrangements for the discharge of the balance agreed.
Notwithstanding that the Act specifically refers to vendors, in practice what has been happing is that purchasers and even Financial Institutions are being required to produce such a clearance certificate.
When selling your property, it is highly recommended that you acquire various documents in advance to ensure your sale moves quickly and smoothly. We highly recommend attaining the Tax Clearance Certificate as this document typically takes a few weeks to acquire and is usually valid for a six-month period. The reissuing of certificates (if necessary) is a simple process. Without this certificate, however, your sale cannot be completed. If you are getting a mortgage, most financial institutions now require that you produce your certificate to them.
Should you have land tax and other taxes due on the particular property you are selling it is recommend this be discussed in advance with your realtor and attorney. They will advise you accordingly on what steps to take.
The key to completing your sale in a timely fashion is to carefully select a team of professionals to work for you. Your selection of an informed realtor and forward-thinking attorney will assist greatly in meeting your end goal.
Knowledge is the key to progression and we wish to share our knowledge with you.