Everyone dream of buying a house of their own, and almost all of us work tirelessly to have one. It is an overwhelmed emotion when you buy or sell a residential property but must be focused on the legal actions in Trinidad and Tobago, such as stamp duty that is required to convey the property between the stakeholders. The selling and buying of property can be a tricky deal as it involves various legalities.
Without complete knowledge about the sale and purchase of property in any area could lead to any unfortunate outcome. Are you going to buy or purchase any property soon? Are you a foreigner who is seeking any investment opportunities in residential properties in Trinidad and Tobago? If yes, then you must know about the stamp duty you have to pay.
Payment of stamp duty is crucial in any property matter where the stamping of legal documents is involved. However, most people are either entirely unaware of this tax or choose to oversee.
Let us make it clear that no matter how hard you try to skip these legalities, you cannot turn your eyes off from stamp duty as it is the state implemented duty or tax. Here are five things that you need to know about stamp duty in Trinidad and Tobago.
What Is Stamp Duty?
Have you heard the term stamp duty? You might be wondering why you have to pay for stamping the documents. Well, It is a form of tax or duty that you have to pay while carrying on particular transactions involving legal documents.
The legal documents that require stamp include Deeds of Mortgage, Release of a Mortgage loan, Conveyance of Gift, and Deed of Lease. If you are involved in any such transaction, you are liable to pay stamp duty.
How Much Do I Have To Pay For Stamp Duty?
Stamp duty in Trinidad and Tobago is not a fixed tax as it varies from property to property. It is a rate that the state implies properties in compliance with certain factors. You can check the rates for various properties with the Inland Revenue Division of the Ministry of Finance.
Stamp Duty on Residential property:
For the residential properties, including the dwelling house, we have the following stamp duty rates. In the budget 2020, the government has increased the exemption on stamp duty from $850,000 to $1,500,000 for first-time homeowners. So if you are buying any property, whether residential or commercial, for the first, the government exempts you from paying stamp duty if your property value equal to or less than $1.5M.
If the value of the residential property exceeds $1.5M TTD, the following rates shall be applied
3% on every dollar of the first $400000
5% on every dollar of next $500000
7.5% on every dollar after that
Stamp Duty on Residential Property (Land)
As far as the land for residential property is concerned, the government has implemented the following rates. If the land’s value at disposal equal or less than $450000, the property is exempt from stamp duty.
For every $200000in excess of $450000 get a stamp duty of 2%
For every $200000 over $650000 get stamp duty of 5%
And every dollar above $850000 get stamp duty of 7%
Are There Any Stamp Duty Exemptions For First-Time Homeowners?
Through an amendment in the Residential Stamp Duty in 2019, the first time homeowner gets exemption from stamp duty on the purchase of property valued $850000 to $1.5 M. However, to get this exemption, the owners have to submit documents to prove they don’t possess any property anywhere in the world.
The attorney or the brokerage company involved in the transaction prepares all the documents and pays duty on your behalf. While hiring the attorney or the brokerage firm, always ask about the stamp duty you need to pay; otherwise, you have to be prepared for a surprise.
The Inland Revenue Division verify the fees paid and then processed the documents accordingly. Once the buying or selling process is completed, you can pay off the firm stamp duty along with their fees.
Do I Have To Pay Property Tax?
Yes, stamp duty is only the tax that you pay while carrying on certain transactions. However, the property tax is 3% of the Annual Taxable Value of the residential property. The Annual Taxable Value is 9% of the Annual Rental Value of the property.
Which Assets Are Dutiable?
The assets that draw duty widely vary depending on the State or Territory in which they are located:
Some of the assets which may be dutiable include:
Shares and units
Land and buildings
Plant and equipment
Items fixed to land
We have shared some significant factors regarding stamp duty that most of the people missed out on. If you plan on buying or selling property in Trinidad or Tobago, you must first confirm with your attorney or the brokerage company how much stamp duty you have to pay.
For further information regarding stamp duty, you can visit the Inland Revenue office near you. How informative this article was, do let us know by commenting in the comment section below.