Non-resident tax increase?

[Ducks]

Just looking to budget for the coming year, and have been quoted a huge increase for the non-resident tax this year. It works out to be somewhere in the region of 60% more than last year. That seems very extreme for a one-year jump. I hasn't heard anything about a huge hike, though perhaps I have not been looking in the right places. 

Anyone else having this issue? Is there a reason for it? I'd love any insights anyone has to offer!

[Cotillo_Tom]

It's an effect of Brexit Ducks.  As EU citizens, we were getting a reduced rate, 19% from memory, but now we are non-EU citizens it has increased to 24%, I think.

You need to check if your local council have reassessed the values in the last year, as there are two multiplying figures.  I think it was 2% for an old valuation, but dropped if the valuation was within the last 5 years. 

I might have my percentages and other bits wrong, as I haven't paid this tax since becoming a resident here, but it is somewhere along those lines. 

Tom.

[Ducks]

It's an effect of Brexit Ducks.  As EU citizens, we were getting a reduced rate, 19% from memory, but now we are non-EU citizens it has increased to 24%, I think.

You need to check if your local council have reassessed the values in the last year, as there are two multiplying figures.  I think it was 2% for an old valuation, but dropped if the valuation was within the last 5 years. 

I might have my percentages and other bits wrong, as I haven't paid this tax since becoming a resident here, but it is somewhere along those lines. 

Tom.

Thanks, Tom. Very jealous of those smart and brave enough to have established residence, but we're just not in a position to make that jump right now, unfortunately. Maybe in a couple of years! As to the Brexit increase, we're Irish, so I don't think it can be that— and a 5% difference wouldn't account for the enormous rise, either. 

Anyone know where we might find the council values, or if they've been increased? We're in Caleta.

[FVmouse]

If you’re Irish then you can still use 19%, the 24% figure is for non EU residents.

Large tax hikes are a certainty and non residents are a very easy target. It will come no doubt.

[Ducks]

Large tax hikes are a certainty and non residents are a very easy target. It will come no doubt.

You're right there! Maybe that's all this is. 

We have someone handle this for us and have gotten our quote back, so I wanted to ask here before asking them in case the reason was common knowledge I had just somehow missed. 

[FVmouse]

Regarding the fixed property component of the Non-Resident tax, it is calculated as ....

Catastral Value x A x B x C

where 

- C is the tax rate (19% or 24%)
- B is either 1.1% or 2% depending on the so-called Revaluation Date
- A is a percentage set by Government
- Catastral Value is the rateable value of the individual property set by the local municipality.

Any or all of these four variables is moveable but moving the first three has consequences for the locals so is not so easy for the authorities to do. 

Moving the Catastral Value (Revaluation) should only be done Municipality wide based on inflation and other macro-economic data. It should certainly not be done in a piecemeal discriminatory fashion based on the residency of the owner. But watch for precisely this as some of the island’s councils already have form doing precisely this !!

Those for which an individual piecemeal revaluation takes place are well within their rights to use the lower number for B but the authorities insist this should not happen as B should only change to the lower number following a general council-wide Revaluation. So basically it amounts to random discrimination at the whim of the council....

Please ask your contact for details of what they’ve heard.

[Moonlight]

The town hall in Caleta ,Ivan is your man ,he normally sits on the left.

Or you can find the Cadastral value on your IBI invoice he would also be 
able to tell you when your property last had a revaluation.

[beachlife]

I don`t understand why you are paying more tax this year than last year.

You pay NRT for the previous year. Until 01/01/21 the UK was in transition stage still so still counted as an EU country for the tax year from 01/01/20 - 31/12/20 your tax rate is 19% it will not be 24%.

For the tax year 01/01/21- 31/12/21 which you will pay in 2021 the tax rate will then be 24% then if you are a non EU citizen.

[Ducks]

Have now been told it's due to the fact that the value hasn't been updated in so long. Guessing we just hit the ten-year mark since the values were updated? That would mean 2011, which I guess makes sense— people probably pushed for a re-evaluation during the recession. 

Supposedly, ten years is when it goes from 1.1% to 2%. Maybe everyone in the Antigua area will be getting an increased bill this year? 

Can anyone with access to their IBI form for a property in Antigua/Caleta tell me what date theirs was last assessed? Be curious to know if they did a big evaluation in 2011 or just some areas.

[FVmouse]

When the Revaluation Date is more recent than ten years the B number is 1.1% not 2%. It is the opposite way around to your post.

So the thing to look out for is your CV going up but Antigua not then adjusting their council-wide Revaluation Date down to less than 10 years ago to reflect this recent change (and so allowing everyone to use 1.1% instead of 2%). If that happens to you and it does not happen to the locals then it is discrimination pure and simple, and you can guarantee the council won’t be looking at the CVs of the locals....

A few years back La Oliva reduced the A number by 9% but simultaneously increased certain property CVs by 21% so that the product of the two went up 10% for those properties but actually dropped 9% for the other properties which weren’t revalued upwards (including all the locals natch).

The people to which this happened were so incensed that they started using 1.1% for B instead of 2% claiming that their properties had manifestly been revalued less than 10 years ago. 

La Oliva say this is not correct but it would be interesting to see it argued in court as it all looks very underhand.

It is this type of thing to look out for....