Sunbelt Blog

December 2016

KPMG

Meijburg & Co Caribbean

Tax & Legal



Take advantage of the tax relief available for investment in, demolition and/or refurbishment of property on Bonaire, by Laetitia Wall

If you own property on Bonaire you must, in principle, pay property tax each year. Property tax is generally levied on the party who, at the beginning of the calendar year, is registered with the Land Registry Office as the owner of or the beneficiary to the property, unless it appears that someone else is entitled to the property at that time. However, no property tax is levied if this involves a private home that you use as your principal residence or if the property is part of the business assets of your sole-trader business.

You pay property tax on the benefits derived from the property. These benefits are set at 4% of the property value. Property tax of 17.5% is levied on this benefit. Bonaire also levies a 15% surcharge. This means that on Bonaire you effectively pay 0.805% on the property’s value. If someone personally, rather than through a company, owns a second home, the first USD 70,000 of the value of the property is exempt.

For the purposes of property tax, the property value is generally determined once every five years on January 1. This differs if changes in value occur during those five years as a result of, for example, demolition or destruction. In that case, the property value is redetermined at January 1 of the year following the year in which the change in value occurred. Thus if there is partial or total demolition or destruction, it is worthy looking into whether the property value can be determined at a lower value.

Favorable tax relief is available if the value of your property (subsequently) increases due to construction, refurbishment, improvements, expansion or renovation. In that case, upon request the increase in value will only be taken into account at the beginning of the eleventh calendar year following the calendar year in which the increase in value occurred. No property tax is thus payable on this increase in value during the first ten years after a refurbishment.

Meijburg & Co Caribbean has considerable experience with property tax and would be pleased to help you with the property tax aspects of investment, demolition and/or refurbishment.

Meijburg & Co Caribbean

Tax & Legal                                                          Fong-Mang Cheong           cheong.fong-mang@kpmg.com

Bulevar Gobernador N. Debrot 31                   Wendell Meriaan                 meriaan.wendell@kpmg.com

Kralendijk, Bonaire                                             Paul Arets                             arets.paul@kpmg.com

                                                                                Pim Jansen                          jansen.pim@kpmg.com