V.I. Property Tax
| By Chris Hanley |
As with everywhere in the
United States, if you own property, you pay tax on it. In
the Virgin Islands the tax levied is considered quite
reasonable when compared to most stateside taxes. It is
based on a simple formula; Property Value X 0.6 (60%)
X 0.0125 (1.25%) = $Tax Amount, thus a $100,000
property would pay $750 per year.
In most recent years the government has been late in issuing the bills. Usually about two years behind. There has been much talk about accelerating the pace of issuance to catch up, but nothing a/o 4/27/98. To deal with this at the closing of a property sale when taxes are prorated to closing date, usually the closing statement is adjusted to reflect a credit to the buyer for the unpaid/un-issued bills so that when they are issued and payable, the buyer simply pays them then. The parties must assume that the tax amount for the years after the closing will be based on the new sales price. Thus lenders will often escrow tax payments based on this new value. In many cases, however, the tax office neglects to register the new value, and thus the buyer may be paying too little or too much tax. Buyer beware. Do the math and follow up with the tax office. The property value displayed on the tax bill is not the full value … it is 60% of the market value. So don’t be misled; you must add the other 40% into that figure to determine the property’s market value as assessed by the tax office: $Market Value$ = assessed total value on tax bill ¸ 0.60
Christiansted - at the Lt. Governors Office, King Street (340) 773-6449 Frederiksted - at the Lagoon Complex (340) 772-3115
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